Today’s banking announcements were marketed as bring finality to the banking crisis but that was always unlikely. The final costs and implications of the crisis still depend on stuff that happens in the future which, word has it, can be tricky to predict. Jagdip has an as-always excellent discussion of the various loose ends here. I think the point that AIB and BoI’s non-NAMA loan books have not been subjected to the same stress tests as Anglo’s is an important point and one that could come back to haunt us again.
On the fiscal front, Minister Lenihan’s announcement of a new four year plan is welcome. Though the official statement didn’t say this, the Minister’s said during his press conference this morning that the plan would detail both expenditure cutting and revenue raising measures which would make it a more credible plan.
That said, the effect of multi-year plan in convincing the bond markets that we are on the road to sustainability will be severely limited by the fact that the government will have at most two budgets, and far more likely one, before the next election.
With the government having taken the decision to stay away from the sovereign bond market until January, there is a strong argument in favour of calling an election to take place in November. Each of the political parties could be given 3 weeks to prepare their own multi-year budget proposals, followed by a 3 week election campaign, giving a new government another four weeks to negotiate a program for government and introduce a December budget.
This course of action would have the following advantages.
1. Because we are on a temporary break from the bond market, the movements in bond spreads that would take place during the campaign would be essentially irrelevant. All that would matter at the end of the day would be the budget and multi-year plan implemented by the new government.
2. The multi-year plan would be seen by the outside world as having political legitimacy. The question of whether the government had a mandate to introduce unpopular measures would disappear. And despite regular claims from journalists that the opposition are irresponsible and have no policies, both Fine Gael and Labour did produce plans last year detailing how they would implement a €4 billion adjustment. Likewise, I would have little doubt that they would be forced to provide multi-year plans to match the government’s and that the election debate would be dominated by the comparison of these plans.
3. The difficult decisions in the upcoming budget would be taken by a new government, most likely with a large majority and not worrying about elections for another five years. Difficult decisions like the introduction of a property tax could be taken without concerns about discontented backbenchers and with the knowledge that the economic situation will look better in 2015.
I’m sure in writing this I’ll get the usual flak from the usual sources, claiming I’m putting this argument purely because I’m a Labour supporter or a Blueshirt or something or other. In truth, I have no affiliations or loyalty to any political party. I just think that there are a number of objective arguments for calling an election now. If the government puts together a concrete multi-year fiscal plan and runs an election campaign on the basis of it, they will have done a considerable service to the country.
83 replies on “Argument for an Election Growing?”
I agree with you.
It is certainly worth getting each of the parties to lay out their budgetary stall for multi-year budgets. The economy is *the* issue for the next election.
I will be voting for the party with the most credible plan for it… and the one that promises a new monorail for Tullamore 😳
We need some number crunching on whether a 4 year adjustment while keeping to the EU targets can be done within the constraints of Croke Park given what we now know about the economy, even if the debt level problem is ignored.
The citizenry did not vote for ‘painful’ in 2007 (or in 2002), nor did the citizenry get the option of ‘voice’ on ‘colossal’ political decisions that impact massively on its sovereignty.
I believe the real discussion is that there are no credible candidates or parties, not that there are no credible plans. And I know it is tempting to brush this argument off as ridiculous.
An election night help but is far less relevant than you might think.
If economics were all that mattered your arguments are stellar, alas, there is more to Ireland than its disastrous government and imminent need for help.
Sick, poor, unemployed, all these words mean more than deficit, GNP, or bailout. And they vote. There is a bigger picture, always.
No party is going to publish a detailed budget as part of a manifesto.
The grubby Greens are likely to try and delay the inevitable payback in Hades for their Faustian bargain.
With no prospect of a big international recovery, Cowen may well call an election before defeats in 3 bye-elections.
They’re hardly going to be in a rush to surrender their €50,000 credit limit cards.
They should be all packed off to Sceilig Mhichíl as an Elba or St. Helena for reeducation, assuming they are declared guilty of crimes against the Irish people!
“This is of course a huge disappointment,” former Icelandic PM Geir Haarde, 59, said in a television interview after a vote of parliament authorising a court charge.
Not as disappointing as the echo of the rumble of the tumbrels on the cobblestones of Paris’ Place de Grève, which gave heart to the knitting women, embellished or not, in the writing of Charles Dickens.
It is quite clear that the whole political establishment and I mean the entire dail and their servants have the interests of the banks as their primary political objective.
They are now a minor part of the administrative banking establishment with little or no independence from the higher offices in the local central bank and Frankfurt.
Given that they have little or no leverage over the monetory powers there is only one option for people who want to exercise their own sovereignty.
The mortgage paper is at the heart of their control framework – this paper contract is in my opinion null and void as the elite are incapable or unwilling to govern.
Elites have always extracted a surplus for their activities but now their activities have no positive effect on the wider society – they are in effect welfare receipts like most of us.
In a situation not unlike the beginning of the end for the Edwardian era the obvious solution for Ireland is to create a new land league which will boycott this mortgage paper.
A organisation that contains 100,000 families or more which refuse to obey will be a powerful political force.
Events are conspiring to create this turn of events – we just need a one armed man from England to lead the rudderless redneck masses of this great little country against these parasites.
This may seem unlikely but the Micks and Paddys are waking up from their credit drug addiction and seeing the world with clear vision and great malice.
I’m shocked, shocked to find any consideration of political economy going on here.
The suggestion makes perfect sense, but this is Ireland – not a polity where not even a semblance of rationality holds sway in the political sphere.
Though exhibiting considerable variation, all three recent opinion polls showed the three main parties (FF, FG and Labour) splitting votes and seats roughly three ways. A stable government will need a combination of two out of these three. Labour seems to have ruled out the FF + Lab combo; the perfectly sensible from an economic and political perspective (FF + FG) is the love that dare not speak its name; so we are left with FG + Lab – a recipe for disaster particularly if Labour were to have more seats than FG.
If, however, there were decapitations in both FF and FG we might see the moderate, centrist, competent government that seems to be the norm throughout the rest of the EU.
I enjoyed Punch and Judy shows when I was a little lad but now they seem a bit medieval to me.
The local political establishment is now irrelevant – they don’t even supply decent entertainment anymore.
An eminently sensible idea – it will surely be rejected out of hand.
Perhaps one perspective…
When the opposition obtain the reigns of power either next year or late this year they will study the financial books for a week.
Then an announcement will be made “We had no idea things were this bad”. “So we will have to introduce more hardship because of the recklessness of the last crowd”.
The opposition are not going to produce a silver bullet to this crises. But they can introduce even more severe measures and get away with it by blaming the previous Govt.
Voting out FF + Greens will give some pleasure to the electorate, but the hardship will be applied in a greater force by the new Govt. It’s great when you can blame somebody else!!
One has to be careful what you wish for, as it just might come true….
Even if an election was called in the near future, the current government has pretty much tied the hands of any incoming government in dealing with ‘the banks’.
It surprises me that the continuing emphasis on Anglo is drawing attention away from the ticking domestic mortgage time-bomb. For whatever reason no one in government or opposition devotes much time to discussing its current and future impacts and the possible responses can be assembled (the moratorium on repossessions is just that, a moratorium). With little prospect of a serious dent being made in unemployment in the short term and more ‘cuts’ promised, mortgage impairment and negative equity can only worsen. If any 4-year plan is to hold water, this problem will have to receive attention but all politicians are skirting around it.
An election will only decide who implements the austerity plan and not what gets implemented.
The argument could be made that while we remain in the Euro and while we are receiving life support from the ECB we don’t need a government or dail at all.
In fact we just need an administrator from Brussels.
What is there left to decide?
Well done for sticking the head out. I think you have a point….but dont forget that to politicians the raison d’etre of politics is power. The govt will not, under any circumstances, go to the country until they are forced.
“The govt will not go to the country until they are forced.”
Not necessarily. Prepare a budget with swingeing cuts. Then time the election so that the incoming administration (presumably a coalition) to deliver it without time to revise it.
Recriminations between Govt partners erupt …second election…hey presto, FF are back in!!
This thought came to me today when I saw this ‘four year plan’ element. I’m surprised it hasn’t got more attention. One can make the argument that it’s just a case of ‘who implements the austerity’ not ‘whether it is to be implemented’. How I’m not sure each different type of government would necessarily come up with the same package of measures – taxation versus current spending cuts versus capital spending cuts etc – and in any case I think that it would give greater legitimacy if whatever government is in charge for the next four years had negotiated it.
What we don’t need I think is a government that seeks to blame its predecessor for what has got to be agreed. Sadly there is very little indication that the Irish political classes are capable of rising above such behaviour even in the aftermath of the crisis. I also think Ivan Yates made a good point today when he said that after a few months out of office FF would be leading the crusade against the cuts. Again an example of the political classes being incapable of rising above such petty behaviour.
However Prof Lucey in his comments has illustrated a deep understanding of the Irish political psyche, an understanding that he can surely only have developed after years of closing observing it!
If the election is more than a few months away then there’s still time to outflank the Labour Party by launching the Magic Money Sock party.
The manifesto for this party was outlined previously on this group. http://www.irisheconomy.ie/index.php/2010/04/27/irish-bond-spreads-up-sharply/#comment-47710 . That manifesto is definitely an election winner…at least if Irish political history is anything to go by.
Of course there’s no point running a campaign on the basis of doing the things needed to put this country on a steady basis, bringing in competent administration, preventing corruption, cronyism, etc. so we might as well go with the Magic Money Sock as a value proposition.
Perhaps, once the MMS Party is in government it can just do what needs to be done and not worry about the election after that. People are likely to start thinking FF are great again by then anyway and there’s no mileage fighting against a popular machine like FF over the long term. One win, do the right thing, retire….to somewhere nice and warm like Greece maybe.
This is perhaps a case of going off on a tangent but I think one aspect of this crisis that has perhaps been overlooked is the role that the ‘regional’ psyche of Irish politics and the electorate has played. At a simple level people may cite individual backbench and independent TDs who make deals based on their own areas/constituencies. At a more senior level though in my opinion the situation is more acute.
In appointing cabinet ministers huge regard is given to ‘geographic considerations’. This has long been a problem and it is therefore unfair to cite any Taoiseach specifically for it but Bertie Ahern had a particular obsession with it. We end up with a government of regional czars. One may feel that the downside to this is that talent becomes a secondary consideration and indeed that is one such negative. Thinking about it further however one can appreciate how difficult it is for any government to manage its spending and resources because the focus on geography is as a result of the need to be seen to deliver for all of the regions. It encourages a ‘Gilhooley Delivers’ system of government. In such circumstances woe betide the Minister who comes home to his constituency and proclaims ‘No money for Project X – need for spending restraint’. Or indeed ‘no those houses can’t be built – bad planning – not sustainable – sorry’. In light of this it is little surprise that things were wrecked during the boom years.
Now applying this to our immediate situation – at a simple level we are looking at a situation where individual TDs are demanding funding for local projects (hospitals etc) in return for supporting the government, which calls into question how easy it will be to get this ‘four year plan’ off to a good start. At a more general level it rather leads me to believe that it would be best if the next government were to be elected against the backdrop of the need to implement this program.
Its a sad reflection that the best political questions asked during this debacle came from a comedian – Andrew Maxwell.
There is nothing that the political establishment can provide in their present incarnation – its best to look elsewhere for solutions.
NAMA & the ‘rescue’ of the financial system have had many issues, not least of which is whether not any of the plans/ideas made any sense. But having formulated a ‘strategy’ did the authorities have the managerial and/or technical competence to implement it in a timely fashion (or at all)?
Do they have the technical competence to formulate a credible multi-year plan and do they have the managerial competence to implement it? I think a resounding no is the answer to both questions.
Would a change of government change the answer? I didn’t think so? Is their any supranational agency with such competence? You know where this is heading…
So, the issue of whether or not external agencies are called in is, on this logic, less a matter of whether or not we are bust, but more a technocratic issue around whether or not we have the competence to resolve our situation, whatever that might be.
re you being a blueshirt – nah you’re obviously a shinner…
More seriously, shedloads of info out today, but i told every i converse with this morning that the 4 yr plan was ultimately the most important thing to take out of today. We’ve been somewhat vauge about our allegedly aggressive cost cutting plans up until now (beyond the short term plans). This will enfore actuality over suggestion.
I think the downside or negatives from an election are limited. However I do agree that there may be upside. It may provide some support to consumer confidence. It may sow some seeds of belief that we the people can influence the outcome from all this (No matter how delusional!)
It would also put to an end having to admit to non Irish citizens that Brian Cowen was Minister of Finance before Taoiseach and during the worst of the boom years.
The current govt will compare its 4 year plan and put year 1 to the Dail in December. It is likely to pass. Labour and FG will accept the vborad thrust but oppose some details. This plan will prioritise cuts in services as the Croke Park deal will protect the real source of savings.
There will be an election in the Spring. A new govt will be elected led by Eamon Gilmore probably with the backing of a few lefties and Shinners. On assuming office, he will then implement the same programme with a few spending adjustments offset by a temporary increase in the effective marginal rate of income tax to 70%. It will be call a Fiscal Adjusment and Fairness Levy.
Eureka is correct. We are being run by an administrator from somewhere else. We could do the decent thing and turn over the Aras to this person. it used be the Viceregal Lodge after all.
If we remain in the Euro and as long as we are in these dire straits our fiscal and monetary policy will be determined elsewhere.
An elected government is an expensive indulgence.
We do not need a government. The republic is dead!
A sociologist, a doctor, a engineer, and an economist are in a bar debating which is the oldest profession.
The sociologist says “it must be sociology because sociology is the study of social interaction, which part of. is when a man and a woman come together this is when life is begotten therefore sociology is the oldest profession”.
The surgen says “ah but where did the woman come from, why god took a rib from Adam therefore surgery must be the oldest profession.”
The Engineer smirking to himself, waiting, then says “but before there were men and women god had to create order from chaos and what does engineering do but create order therfore engineering is the oldest proffession”.
The economist takes his hat off taps his pipe on the bar and says “and gentlemen where do you think the CHAOS came from.”
The woeful science is not pricing the moral cost of pandering to the bond markets, the dog in the street knows this socialism for the rich is plain theft and morally bankrupt, it is hard to convince a population of the right of law when it is clearly act one way for one set of citizens and another for the connected.
How does one price the systemic risk posed by obvious and institutionalised corruption in a balance sheet or simple linear equations, of which Jermey Bentham’s science of utility is so fond of.
@KW great idea. It would mean that the people would be part and parcel of the solution and take responsibility for actions taken.
The MoF has already referred to the necessity for reform of the public service. I would guess that’s RIP CPA
@ Tull Mcadoo,
There was a article in the SBP a few weeks back about the Revenue comptuer system. The software has been upgraded to introduce a 3rd tax band.
Your prediction of 70% marginal rate which you have mentioned several times before on this site could be just around the corner.
Either way, we won’t have too long to find out.
A Parliament and a Cabinet are part of the furniture of a nation state. We could do with reducing its cost thoug seeing as it will not have much to do. The Cabinet should be reduced to the constitutional minimum of 7. The Dail should be reduced to its minimu which is probably around 140. Salaries should be halved and ministers should get 50k on top. No half cars either.
A new govt wont change any of the main policies, they’ll simply make them more acceptable when people finally realies there is no alternative.
The FF/Green government would be stark-staring mad to call an election now. If they did, they would deserve to return with no seats for (a) stupidity (b) lunacy (c) no will to fight (d) lying repeatedly about going the full distance. They have an adequate majority and have no need to call an election. Why should they choose the darkest hour (ie the one just before the dawn) in the economic and electoral cycles? Doing so would be proof that they had lost their marbles completely, and would render them deserving of being consigned to the dustbin of history. What they should do is stand up and fight, just like Paul Gogarty of the Green Party has been in the news for doing today.
In addition, it would be bad for Ireland’s reputation to call a premature election. One of Ireland’s big strengths is that, in times of adversity, the people prefer to roll their sleeves up and work hard to find their way through it, rather than to go on strike, riot, indulge in revolutionary antics, as so many countries in Europe do. Yesterday, most of Europe went on strike and closed down. Ireland worked on. It is that which will succeed in, indeed allready is succeeding in, getting the economy back on to a high-growth path.
As the latest opinion polls show, an election now, just before the bubble of negativity goes pop, would also produce the worst possible result and the first left-dominated government in Ireland, with the ex-marxist Eamonn Gilmore as Taoiseach, with the statistically-illiterate Joan Burton (who a year ago forecast that the population would fall by half a million in 2010) as Minister for Finance, and with various unsavoury characters like Ivana Bacik pushing their extreme left-liberal Dublin 4 social agenda. That, of course, is why the Dublin 4 media are pushing so hard for an election now. It is their brief window of opportunity. Once the economic recovery becomes more established and apparent to the wider electorate, the Labour bubble will burst, and the opportunity will be gone.
I’m not even sure that FG want an election now, where they’d play second fiddle to the various shades of Marxist (both of the Karl and Groucho variety) who dominate the Labour Party. It is virtually certain that the next government will not be led by FF. It will either be a FG-Labour government, with FG by far the larger, or a Labour-led one. Whatever they say publicly, I think that FG would prefer an election when the electorate are in a much more positive mood, and the most likely outcome an FG-led coalition rather than, as now, a Labour-led coalition, which, knowing Labour’s history of always wrestling with its conscience and winning, could quite easily be a coalition with the remains of FF rather than FG.
My prediction is that there will be a tremendous outpouring of demands in the media in the next couple of months for an election. The country will be deluged with media-generated negativity. The aim will be to portray the economic situation as hopeless, so hopeless that only a left-wing Labour-led government can save it. The fact that Labour is ahead in the polls has whipped the appetite of the Dublin 4 media for an election soon. The Vincent Brownes, Fintan O’Tooles and Gene Kerrigans of Ireland have been waiting all their lives for this moment. For them, as in the old Elvis Presley hit, ‘Its now or never’. If the FF/Green government can withstand this media onslaught until December, and, given their majority I see no reason why they shouldn’t, then they should have no difficuty lasting until June 2012. The turning-point is likely to be the publication of the GDP figures for Q3 in December.
The doom industry has taken the GDP figures for Q2 as proof that their predictions are coming true. Alas for them, NO! They were a statistical freak. The Q2 figures were freakishly bad. The Q3 figures will be freakishly good. In fact, so good that David McWilliams’, Constantin Gurgiev’s and Morgan Kelly’s Christmases may be completely ruined in 2010. Remember, you read it here first.
As I explained in another thread earlier this week, in Ireland, quarterly GDP figures are extremely volatile. The reason is the exceptionally open nature of the economy, with both export and imports the size of GDP. As a result, the underlying GDP growth rate is frequently swamped by movements in net trade, ie the ratio of the change in export volume relative to the change in import volume. However, by its very nature, this tends to fluctuate from one extreme to the other each quarter.
GDP rose in Q1 because exports rose by +7.1%, while imports rose by +3.7%, producing a rise in net trade of +3.3%, which swamped the underlying growth rate and pushed GDP growth in Q1 up to +2.2%. Freakishly good. GDP fell in Q2, not because economic activity was contracting, but because exports rose by +1.6%, while imports rose by +4.5%, producing a fall in net trade of -2.8%, which swamped the underlying growth rate and pushed GDP growth in Q2 down to -1.2%. Freakishly bad. But, the underlying growth rate, as indicated by domestic demand, was actually higher in Q2 than in Q1, a fact that is also supported by numerous surveys of economic activity, by the QNHS report for Q2, by the trend in the Live Register and in the number of monthly redundancies, by the number of PPSNs issued, and so on.
The GDP changes in Q1 and Q2 were no surprise to anyone who studies the monthly statistics that are published well before the GDP figures themselves are published. People, who are familiar with them, pay little attention to quarterly GDP figures, as they are so volatile. It is the full year figures that count. Changes in net trade, which affect the quarterly GDP figures so much, are signposted weeks/months in advance by quarterly changes in net merchandise trade. I have calculated the index ratio of export and import volumes (to base 2009 Q4 =100.0) for 2009 Q1, 2010 Q1, 2010 Q2 and July 2010, the first month of 2010 Q3 and the latest month for which figures have been published. They are:
2009 Q4: 100.0
2010 Q1: 107.5
2010 Q2: 98.9
2010 Q3: 115.4 (July only)
That’s why the changes in GDP in Q1 and Q2 were no surprise, at least not to me. They were clearly signposted weeks in advance. Net merchandise trade (ie export volume/import volume) rose by 7.5% in Q1, a harbinger of the rise in GDP revealed a couple of months later. Net merchandise trade then fell by 8.0% in Q2, a harbinger of the fall in GDP revealed a couple of months later. But, the really worrying news (for the doom industry) is that in July it rose by 16.7% over its average Q2 level. It is very likely that it will come back somewhat in August and September. Monthly volatility of merchandise trade figures almost guarantee that. Even so, a very hefty increase in Q3 over the depressed level in Q2 seems certain, a harbinger of a very hefty rise in GDP in Q3, when revealed in December. The publication of the Q3 GDP figures in December is likely to be the moment when the bubble of negativity about the economy goes pop. The FF/Green government should spare no effort to hang on until then, as that will be the turning-point. If they do, they should have a reasonably smooth passage until June 2012. Of course, there is no chance of them winning in June 2012, but they will certainly perform much better then than in November 2010. And, more importantly, any FG/Labour government elected in June 2012 will be weighted much more heavily towards FG than would be the case in November 2010.
The main thing to grasp is that there are numerous positives in the economy. Naturally, opponents of the FF/Green government would like an election now before they become so strong that the bubble of negativity they are thriving on bursts. Among recent worrying (for the doom industry)developments in the economy we have:
(a) The volume of both manufacturing output and exports are set to rise by a double-digit amount (probably in the range 10% to 12%) in 2010, the best performance in the EU15 and the best in Ireland since the 1990s. At the start of the year, both the Central Bank and ESRI were forecasting that the volume of exports would fall in 2010, but a double-digit rise now seems very likely. The extent of the resurgence in manufacturing output since late 2009 is clearly evident in the following figures, which show the index of the volume of manufacturing output each month since November 2009:
Nov 2009: 91.3
Dec 2009: 90.7
Jan 2010: 110.1
Feb 2010: 108.3
Mar 2010: 112.5
Apr 2010: 102.3
May 2010: 111.4
Jun 2010: 116.1
Jul 2010: 120.2
(b) Agriculture is having its best year for a very long time. Both output and input prices are moving in a favourable direction (output and export prices up, input prices down). For once, the weather has also been favourable. Figures out just yesterday showed milk output up by 12% in August compared with August 2009. It looks likely that agricultural incomes will increase in 2010 by much more than the 30% that Teagasc predicted a couple of months ago. That’s why the crowds at every rural-related event have been way up in recent months.
(c) Tourism had a disastrous start to the year, with arctic weather in January, February and March, followed by the volcanic ash cloud in May and June. All the signs are that it has recovered strongly since mid-summer.
(d) Unemployment has stabilised. There has been a debate raging for some months regarding the accuracy of the seasonal adjustment made to the monthly figures. But, if we look at the unadjusted figures each month in 2010 and calculate the y-o-y increase with the same month in 2009, it has come down every month. It has clearly stabilised. A continuation of this trend will see y-o-y falls by early 2011, at which point it will possible for the government to claim credibly that unemployment is falling
Jan 2009: 326,272 , Jan 2010: 436,936 , y-o-y: +33.9%
Feb 2009: 352,453 , Feb 2010: 436,956 , y-o-y: +24.0%
Mar 2009: 369,203 , Mar 2010: 435,121 , y-o-y: +17.9%
Apr 2009: 381,876 , Apr 2010: 432,657 , y-o-y: +13.3%
May 2009: 394,134 , May 2010: 437,922 , y-o-y: +11.1%
Jun 2009: 415,462 , Jun 2010: 452,882 , y-o-y: +9.0%
Jul 2009: 432,421 , Jul 2010: 466,824 , y-o-y: +8.0%
Aug 2009: 436,725 , Aug 2010: 466,923 , y-o-y: +6.9%
Sep 2009: 419,854 , Sep 2010: 442,417 , y-o-y: +5.4%
(e) The number of monthly redundancies is falling sharply. They peaked at 7,948 in May 2009. They were down to 4,399 in August 2010. While I’d expect them to fluctuate a bit on a monthly basis, the long-term trend is clearly down.
Jan 2009: 6,588 , Jan 2010: 6,577 , y-o-y: -0.2%
Feb 2009: 6,212 , Feb 2010: 5,626 , y-o-y: -9.4%
Mar 2009: 7,680 , Mar 2010: 5,474 , y-o-y: -28.7%
Apr 2009: 7,131 , Apr 2010: 5,736 , y-o-y: -19.6%
May 2009: 7,948 , May 2010: 5,016 , y-o-y: -36.9%
Jun 2009: 6,764 , Jun 2010: 5,323 , y-o-y: -21.3%
Jul 2009: 6,285 , Jul 2010: 5,298 , y-o-y: -15.7%
Aug 2009: 5,831 , Aug 2010: 4,399 , y-o-y: -24.6%
(f) Although prices in the property sector are still falling, at least for residential property, activity in the property market is rising. This is from today’s Irish Times property page (link below):
Toy giant to open two major stores.
Investment property turnover up 95 per cent in 2010.
Retail multiples snap up vacant lots at Swords Pavillion.
Pick up in demand for office space – up 40 per cent on 2010.
Tide rising at Whitewater – seven new retail units opened
(g) The recent IBEC survey for Q3 showed a massive improvement in the numbers saying their businesses are doing very good/good as opposed to those saying bad/very bad. Figures are:
balance of very good/good over bad/very bad in IBEC surveys:
2009 Q4: -32% (i32% more bad/very bad than very good/good)
2010 Q1: -7%
2010 Q2: -5%
2010 Q3: +1% (1% more very good/good than bad/very bad)
(h) From the RTE website, one of the leading recruitment agency in Ireland announced last week that the number of professional jobs on its books was up 54% in August 2010 compared with August 2009.
(i) PPSN numbers rising. Always a good forward indicator of the labour market. The numbers issued in August 2010 were higher than in August 2009, the first time a y-o-y increase has been recorded since 2007. Figures are:
Jan 2009: 17,532 , Jan 2010: 13,470 , y-o-y: -23.2%
Feb 2009: 14,377 , Feb 2010: 11,837 , y-o-y: -17.7%
Mar 2009: 15,204 , Mar 2010: 13,083 , y-o-y: -14.0%
Apr 2009: 13,585 , Apr 2010: 12,125 , y-o-y: -10.7%
May 2009: 13,493 , May 2010: 12,497 , y-o-y: -7.4%
Jun 2009: 14,230 , Jun 2010: 13,378 , y-o-y: -6.0%
Jul 2009: 15,168 , Jul 2010: 14,237 , y-o-y: -6.1%
Aug 2009: 12,614 , Aug 2010: 13,727 , y-o-y: +8.8%
(j) Net emigration may have peaked in year to 2010 Q1. This is by no means a certainty. We need to await the QNHS figures as the year progresses. But, a credible case can be constructed that this is indeed the case. We know for certain that net emigration was 34.5k in the year to April 2010, less than half the 70k ESRI forecast for that period last July. This was not sufficient to stop the population growing. It was up 11.k in that time. But, it was sufficient to bring a fall in the poulation aged 15 plus. However, the latest figure from the Q2 QNHS survey show this fall moderating, indicating net net emigration in 2010 Q2 was less than in 2009 Q2. Figures for population aged 15 plus are:
2009 Q1: 3,531.5 , 2010 Q1: 3,516.0 , y-o-y fall: -15.5
2010 Q2: 3,523.8 , 2010 Q2: 3,512.4 , y-o-y fall: -11.4
The lesson of all this for the FF/Green government is clear. They should not panic. Things are getting better. They need to focus on getting the recovery in growth spilling over into consumer demand, the one area that is not recovering, although it has stabilised. If they do that, there is everything to play for. They won’t win an election in June 2012, but they will do a lot better than in November 2010. It is precisely because of this likelihood that calls for an election will reach fever pitch in the next couple of months. They should resist them.
“i told every i converse with this morning that the 4 yr plan was ultimately the most important thing to take out of today. We’ve been somewhat vauge about our allegedly aggressive cost cutting plans up until now (beyond the short term plans). This will enfore actuality over suggestion.”
Yep. Sadly the rumours flying around, Ursula Hannigan quoted senior FF sources, are that 4.5 bn in cuts will be sought.
I presume this is cuts and tax raises. If this is so, it just stands us still as the T-shop has already indicated that the extra cost of the banks is 1.5 bn a year. It is a continuation of the current plan, making up the hit to income/expenditure to keep it on track.
It is just not credible if that is the case.
@ John The Optimist,
That was one hell of a post….
Put a smile on my snout as well!!!!!!!
Mad to go for change of govt now, who do you think would do any better (Joan Burton or Michael Noonan??) and we would look worse than ever. You know what they say, ‘stand by your man’ I am not a fianna fail supporter I just want the best outcome-not at all convinced by any of the others.
@Bond, Eoin Bond
“A new govt wont change any of the main policies, they’ll simply make them more acceptable when people finally realies there is no alternative.”
Ergo we actually don’t need one at all.
The Europeans have made all the honest and sensible decisions in this case. It’s just a pity that they weren’t in charge from the start.
This isn’t meant personally but your lack of enthusiasm to consder alternatives may be based on the fact that current policies are directly geared to placate your industry at the expense of ordinairy tax payers. But watch out. When every body else has left – you might be the one left paying the taxes!
“As the latest opinion polls show, an election now, just before the bubble of negativity goes pop”
do u not think an election is the needle required to pop your bubble of negativity?
labour won’t take control, those polls are just people venting their anger, an actual election would see fine gael in power. (pending enda’s imminent exit stage left of course).
oh and excellent post. great to finish the day off with some good big numbers
And if there is an election we’ll just have a cobbled coalition between labour and fg that will fail because of fg’s misplaced sense of entitlement. And then we’ll have another election within a few months that will be labour and ff. And that will last but will be unable to do very much different to what has already been done.
So there is no guarantee whatsoever that your election would bring a government capable of lasting more than a few months. Serial coalitions
FF and Labour- like giving matches & petrol to a pyromaniac.
@John The Optimist wrote
“the darkest hour (ie the one just before the dawn) ”
But Mao said “it’s darest just before it goes completely black”
Guess the choice depends on which version FF buys in to
brian lenihan was a bit demonic on prime time. shouting at miriam o’callaghan could be a big mistake
Miriam puts on a poor show in these head to head battles. Just letting the Minister answer without rebuttal.
There have been encouraging statements from Brian Lenihan today however. He talks about a “complete reappraisal of the Public sector”. This is encouraging. Maybe they will be able to address the defecit fairly.
yeah anytime he got annoyed she backed off. jeremy paxman would be handy now
@John the Optimist
What makes you think that the Labour leadership is anti – bank , I will direct you to my earlier post where Eamon Gilmore made it clear that they will back the banks when the chips are down.
You need to divorce yourself from the false left / right paradigm.
This little political two step has served the banks well over the decades as the left increase fiscal debt to reward their clients and then their is a subsequent reaction from the right to increase private debt.
In the long run the banks always will win as long as global energy consumption and consumption growth increases.
Why do you want to drive consumption or export growth without increasing wealth ?
Whats is the point of such actions ?
Why do you cheer a once semi – sovergin state whose main policey is to sell its remaining assets and incorporate debts withen its jurisdiction and control.
Where is the beef John.
I have to confess your figures and output baffling to me – what the hell has GDP got to do with Irish wealth.
We have been the septic tank for Friedmanite wet dreams for years – with the socialists in this country distributing temporary profits from the capital rundown of our own country and others.
How can you cheer such Babylonian decadence and moral decay.
In a era of zero or negative growth you have the one advantage of knowing the chain of command and its priorities – in this respect the depression is giving the Irish people a great crash course education.
Sometimes ya call elections
Sometimes they call you!!!
It makes not a whit of difference who governs (except for the satisfaction of giving the present incumbents their P45s). We have already lost our sovereignty and are a German colony. Hitler is laughing in his grave.
This is like a war, when the Government in power have so manifestly failed to maintain the country’s defence or manage the national interest that to persist with their leadership means defeatism leading to a worsening catastrophe.
“You have sat here too long… , in the name of God, go!” etc etc
The worst mistake was not to have an election 2 or 3 years ago. For that we can thank cowardly backbenchers in Fianna Fail, the Greens and Independents. And we don’t even know how the lost billions were spent.
Why have we such a crap political system that it actually prevents good governance? In a war, most citizens rally around and are willing to sacrifice their fair share, but the burden is not been spread evenly.
the upcoming by elections are significant
Ladies and gentlemen,
first, thanks Karl, appreciate your somewhat outspoken comments on Prime Time.
1. Having seen the edited version of Mirian/Brian interview, I would like to suggest that what we reall need here is a non edited LIVE discussion on at least 8 consecutive weekends with a panel of guests and policy makers. Emphasis on LIVE!
2. Back in April I made a statement: “Merkel/Schaueble, DSK and Trichet held emergency phone conference this morning. Question is: Will the debt Junkies continue to share their needles? The debt spiral/contagion is in full motion!” laughingbear, April 28, 2010
I would like to pick that up and continue down the same line…. Great, now we are off heroin and on methadone until January.
Concerning IMF, well, I intend to think, their ‘Toronto strategy’ is working, don’t mention IMF at all but let the DoF do the very same job instead.
What we are facing is a game of sacrificing low GDP countries for the ongoing Euro Lie. Trichet whistles, Lenihan dances!
Brian Lenihan irish times today: “As far as senior bond holders are concerned, our law treats them the same as depositors.”
They’re all pretty incompatible really aren’t they. A humbled FF’s pragmatism might be a bit easier to work with than the petulant self-importance of FG – so could last a bit longer (but probably only a bit). That’s why not sure an election would bring any real stability.
Sorry… pressed return too quick….. loooong day. My last question I wanted to ask is…. where the bloody Hell do they think growth, and this is the most important variable in their equations, will come from?
What about this utterly ridiculous statement to add 33% to export growth. when USA and China already entered a trade war and we have NO way to devalute?
I am sorry, someone need to explains that to me, I do not see it!
@KW Whilst I think your idea is a good one and warrants support I would echo the concerns raised about the nature of the Irish Electorate.
Even within this forum we can see plenty of examples of the ‘huge sacrifices need to made; but not by me’ mentality. The most obvious example is ‘make the public sector pay but don’t touch the private sector’ sentiment in several of the comments. Frankly, it astounds me.
The public sector has and will continue to shrink in the coming years. Significant pay cuts have been implemented that are causing most who work with the PS serious hardship. The pension’s levy was another pay cut by another name. The PS will do the same with less – it has to. Furthermore there has never been a better time to reform the PS (except of course when the country was awash with money and rather than benchmarking the State could have downsized the PS with minimal incentives). In today’s climate how many Garda or prison officers do you think will be willing to go on Frontline to defend ‘allowances’? But to think that Ireland’s problems will be solved by ‘making the PS pay’ baffles me.
Everyone is going to have to pay. All tax breaks – gone, reduced State pensions, reduced social welfare, increased taxes for EVERYONE through a broadening of the tax base, a single omnibus social insurance contribution, five tax bands and no tax credits. Also, lets get rid of all the middle class tax breaks i.e. free university fees, cross funding of private healthcare and private schools. Finally, if we are not willing to pay for public services lets get rid of them. Where should we start; enterprise supports / universities?
If we everybody in this country is not willing to pay then Ireland is well and truly lost. I may as well take my family and avail of one of the two job offers that are sitting on my desk at present (one in Brussels the other in New Zealand). I don’t think that Ireland is lost but the next few months will tell allot.
It is not elections we should be discussing.
This crisis highlights the core flaws of the European experiment. If California was broke would Obama call in the IMF? Nope.
The Euro is nothing more than a chronically devalued Deutschmark. It serves nobodys purpose but Germany.
It is time to leave the Euro
… ah yes, the meedja.. the source of all the countries ills… the wreckers of banks and hope…ban them…let the citizens read nothing but what is printed on the purest 4-ply tissue… You need to live in a democracy for awhile.
sorry for going off topic
on prime time BL said that imposing losses on senioritas would mean we would have to impose losses on depositors as well. he seemed to suggest that this was one of the principal reasons we could not impose losses on them
I have said a few times that i don’t think this is the case – that although they rank parri pasu the state could simply reimburse any losses they would have suffered in the absence of the deposit guarantee – i think the same would hold for guaranteed seniors. Clearly this reduces any savings possible from burning seniors.
I think it is amazing given the extensive debate surrounding burning seniors that we don’t appear to have absolute clarity on this vital point. if we need to burn depositors BL is right to suggest that suggesting burning seniors is “daft”. If he is wrong it shows a real lack of the basic facts that are required to evaluate the potential policy
on the last prime time cmc said they have been getting alot of legal advice in relation to anglo restructure.
@Sporthog – “Your prediction of 70% marginal rate which you have mentioned several times before on this site could be just around the corner.”
I’ve no doubt that those higher earners who would end up in a position to be paying the 70% rate have either seen the exit door already or know where it is should they need it.
Well done to KW for a very good performance on Prime Time. I thought Brian Lenihan looked a bit rabid in some of his answers to Miriam O’C.
Must be an election in the offing, Declan Ganley is back.
“It is time to leave the Euro”
Were you on a pub stool when you sent that message?
The most recent big currency change was in North Korea. It didn’t go very well.
The head of the finance ministry is reported to have been executed.
We have less brutal incentives pour encourager les autres.
So the people who have presided over an economic crash could handle a smooth switchover to a new currency?
Pat Kenny just read out an email from an unnamed listener-suggesting that we elect the next government for a four-year period based on the plan the parties will put forward in an election to take place before Xmas 😉
KW’s idea, even if it most likely will not be accepted, may have the result of getting the public to engage with the plan.
@ 70% I think you or I would be looking at the door also!!! The problem with wealthy people is that some of them have channelled their wealth into Hotels, Golf Clubs and other structures etc etc. As we both know funding these structures is much more difficult now, if you are going to be hit with 65 ot 70% marginal rate then something has to give.
As the saying goes, “if its too hot in the kitchen….”
I don’t believe taxation alone will solve our problems.
Does anybody know for a fact what the IMF or the EU would ask in return if we asked for assistance?
If not, can we ask them? Surely we can’t make a decision on the best way forward until all the options are know.
Yes, we need an election. Sadly I think that BL and BC are confusing what best for Ireland with whats best for FF.
So Joan Burton got the estimated emigration figures wrong.
How many figures has BL got wrong since it annouced that Ireland would have the cheapest bank bailout ever – Infact not only is it cheap if we play our cards rights and give an a wider guarnatee than any of our competiotors we’ll have a competive advantage.
Miriam O ‘C is a good political interviewer but she should not have been the person to interview Brian Lenihan on this very important economic issue because she hadn’t the level of economic understanding to contradict him when he said things that did not make sense.
In fact since George Lee lost his independence and voice there is no one in RTE that can give the economic reality to the public in a clear warts n’all way.
Prime time need to hire an economics interviewer with credibility and bite.
Lenihans attack on the independence of RTE by accusing them of being over negative on the economy was just as inappropriate as politicians interfering with the work of the Gardai. The Media, after all, are the fourth estate.
@ Eamonn Moran
Agree, i just made a similar point on another trend. Fairness demands that incorrect statements by MOF expecially at this time don’t go unchallenged.
Just putting it out there.
Do a pros and cons on this: Pros of staying=currency stability, protection against inflation, multinationals import in a strong currency, imports cheaper (and all the others left out)| Cons of staying=no real way out of the debt burden, loss of real sovereignty,
To be honest I don’t know if it’s the right thing to do but we need a rational debate on this – looking at the pros and cons.
We have paid the price for stability in the EU. Let’s see if it’s worth it.
its not that Joan Burton got her estimate wrong, its that her estimate was completely off the wall insane at the time and should have been considered such. It was a classic scaremongering tactic where she figured she’d say 500k over 4 or 5 years, and if year 1 came in at 70-80k she could justify it even if we all knew there was a high degree of front loading. However, the numbers are now quite clearly much much lower than assumed, so her medium term estimate looks even more insane than at the time.
The arguments against an election have just got stronger – amongst the ruling parties, who are those who decide when an election is called. The arguments that matter are called the opinion polls! You might as well ask turkeys to vote to have Christmas in November.
Taking into account international bondmarkets when choosing the timing of an election would lose votes – however sensible it might be from an economics perspective.
Optimal strategy for FF is to put an election off as long as possible, hoping that an upturn that Brian Lenihan can take the credit for happens in the meantime. Then call the election, ditch Brian Cowen, and present BL as the next Taoiseach, the man who saved Ireland while battling cancer.
Courtesy of johnboy on thepropertypin:
“*EU’S REHN SAYS IRELAND WILL NOT CONTINUE AS A LOW-TAX COUNTRY (Bloomberg)”
Um, is he referring to corporation tax?
I think this has been obvious for a long time Yoga. People can argue all they want about whether we should increase taxes or not, but in fact we will have to. An ironic legacy of a decade of FF/PD rule.
Since you called Minister O’Cuiv’s comment ‘stupid’, when he said that the July increase in the live register was seasonal, would you say that September’s fall was a real fall or merely seasonal?
Lots more figures out today:
As Eoin pointed out on the other thread, retail sales up 1.4pc y-o-y in August. Not much, but it indicates stabilisation and, if combined with export growth, it means the economy growing.
Other figures out today are quite good too:
new car registrations up 80pc y-o-y in September
redundancies down 30pc y-o-y in September
Combined with the most recent figures for manufacturing output and merchandise exports, both up over 12pc y-o-y in July, and the 5.4k fall in the Live Register in September, it hardly indicates an economy crashing into the ground, as some would like us to believe.
No wonder there is a clamour for an election now.
The cries for an immediate election remind me of football fans, who start screeching for the ref to blow the final whistle, when there are still 15 minutes to go, and their team is holding a vulnerable lead. I’ve done that a few times myself, so I can’t really complain.
Since the figures are seasonally adjusted, I would say it is a real fall. What the fall is due to is an interesting question.
Governments with large majorities – especially coalition administrations – are arguably less stable than governments where discipline has to be very tight because parliamentary voting margins are tight and no one individual wants to be publicly identified as ‘having brought the government down.” Examples : the FF Labour Coalition ’92-94, with its very large majority, collapsed in ignominy; Sligo TD John Jinks got drunk and missed a Dail vote bringing down a 1930s Dail and losing his seat in the process, similarly with Jim Kemmy’s vote against the tax on children shoes in 1981 that brought down the first Fitzgerald/Spring Coalition and whereby Kemmy lost his seat for the next term.
It’s not the size of the government majority that matters , its the cohesion of the government. In the current politicial climate not the media agenda that wants an election desperately, the wishful thinking of independent commentators nor silly posturing by the Opposition (like the ridiciulous row over pairing arrangements last week) will bring down this government. Provided they get through the Budget vote in December, this government will be positioned to go at a time of their own choosing – maybe next year before the three by-elections are held, since it would be a monumental waste of time and resources to hold by-elections if the Government does not plan to serve its full term in office up to 2012 or will have its majority so reduced that it will lose votes in the Dail and be unable to push its legislative programme through. Then again, Haughey’s 1987-89 adminsitration lost four or five Dail votes before he decided to pull the plug and go for an election.
The great thing about the 4 year plan announcement is that it has concentrated minds wonderfully. At the start of September, Stephen Collins was writing in his Saturday Irish Times column that Irish politics was now a ‘policy free’ zone:
“Whatever they say in public, most of them (i.e. Opposition front benchers) have no illusions about the fact that they will be required to make deeply unpopular decisions when they achieve office.
“The two parties are unlikely to spell out in their election manifestos what precisely they intend to do when in office.
“While Fianna Fáil will naturally try to flush them out, the lesson of the British general election is that the electorate doesn’t really expect Opposition parties to give them the bad news and is even likely to punish them if they do. …..Hopefully, they both have a good idea of what they intend to do when they achieve power….”
Fine Gael strategists had also apparently spun out this line with the Sunday Business Post’s Pat Leahy, who noted that FG were picking up on the fact that attack dog politics works swimmingly for the Labour Party whilst the electorate has largely ignored FG’s detailed and earnest policy proposals.
The 4 year plan puts the kibosh on policy free zone politics. However, whilst any fool can produce a few sheets of A4 and call it a ‘plan’, what matters is the credibility of what’s in the document. Yes, both Labour and Fine Gael, and Sinn Fein too as I recall, produced alternative Budget proposals last November. The FG proposals were properly documented and costed. The Labour proposal was for c. €5bn in cuts, which, miraculously were all going to be achieved without any dampening effect on economic growth and moreover, without any proper outline of who was really going to pay for them.
Personally, I would not only like to see a four year plan published, but also legislation introduced to ensure that governments will adhere to the plan targets once it is approved by the Dail and by the EU. So for example, Philip Lane’s suggestion for the establishment of a Fiscal Council could be included, as part of a new ‘checks and balances’ system and legislated for. Also, the government that replaces the current administration should be legally bound to meet the specified deficit targets. They can play around as much as they like – and as much as the political dynamics of the time will allow them to – with how they are going to meet the targets, but they must be on the hook for them.
Obviously, the Minister should consult with the Opposition parties about the Plan. As Finance Ministers go , it’s only fair to say that Lenihan has been open to ideas and suggestions from the Opposition in respect of every Budget and every other major initiative he has proposed since the crisis began. Not that he gets any thanks for it. Political grandstanding about the opposition not being ‘consulted’ is just that, grandstanding for political purposes. One recent example is Joan Burton’s complaint at the Oireacthas Finance Committee that the Merrill Lynch advice to the government in relation the options for the dealing with the banks crisis. This advice had not been published or made available to her personally, even though this material was included in the suite of documents published by the DoF on its webosite on 16 July last:
“Deputy Brian Lenihan: I am sorry, Chairman. I was asked about the advice of Merrill Lynch. The option canvassed by Merrill Lynch was that we should not guarantee the entire banking system but just guarantee Anglo Irish Bank and all of that bank’s liabilities, including all subordinated debt. That is on the record.
Deputy Joan Burton: Will the Minister publish the advice? Will he give us a copy of the advice? He never published it.
Deputy Brian Lenihan: It is already published.
Deputy Joan Burton: Taxpayers paid €11 million for it.
Deputy Brian Lenihan: If the Deputy does not have a copy, we will arrange for a copy to be transmitted to her.
Deputy Joan Burton: I do not have a copy. I thank the Minister for agreeing to make it available.”
It might be a great relief to us all if that sort of politics took a nose dive for a while.
@Kevin O’Rourke – “What the fall is due to is an interesting question.”
Could it be the universities and colleges around Ireland that are currently stuffed to the gills with people (aka ‘mature students’) who were previously on the unemployment stats….. or the planeloads leaving….. etc. ?
Are you an FF ‘insider’ by any chance? You sound from your posts as though you might be. But, apologies if I got that wrong. I actually meant it as a compliment, although most posters on this site would like to feed FF ‘insiders’ to the lions in Dublin Zoo.
“Since you called Minister O’Cuiv’s comment ’stupid’, when he said that the July increase in the live register was seasonal, would you say that September’s fall was a real fall or merely seasonal?”
As I noted on another thread, this was the Minister’s opening statement in his interview about the July Live Register figures
“I think we should put in context, the figures traditionally rise, and have risen every year in the last 20 years in July.”
Do you think that this statement was:
I’m guessing you think (c) but others are more likely to pick the other options.
Fine Gael strategists had also apparently spun out this line with the Sunday Business Post’s Pat Leahy, who noted that FG were picking up on the fact that attack dog politics works swimmingly for the Labour Party whilst the electorate has largely ignored FG’s detailed and earnest policy proposals.
FG’s big problem is that they have over-egged the recession pudding, and made the electorate so pessimistic that they might reject them as well as FF. There is little chance of FF leading the next government. The only realistic outcomes are:
(a) An FG-Labour coalition, with FG by far the larger, as in previous such coalitions of these two parties.
(b) A Labour-FG coalition, with Labour the larger party.
(c) A Labour-FF coaltion, with Labour the larger party.
If the opinion polls are correct, an election held now would result in Labour being the largest party. In those circumstances, Labour can choose whoever they like as their junior partner, regardles of what they said in the election campaign. Any FG politician, who trusted Labour, in those circumstances, to opt for them as the junior partner, rather than FF, is ignorant of the history of Labour. Utterly unprincipled. FG’s only certainty of being in power after the next election is to have a lot more seats than Labour. This will depend on the mood of the electorate in relation to the economy.
If the electorate believe that the economy is recovering, that the low-tax enterprise economy that Ireland has had since the 1980s is basically sound, but needs better management, then the electorate will vote for an FG-led government. If they believe, a la Fintan O’Foole, that both the economy and society are broken beyond repair and need a total transformation, then they may vote for a Labour-led government. As I said, in those circumstances, Labour would be as likely to choose FF as junior partner as FG. In this respect, it doesn’t matter that much whether or not FG is ahead of FF. An outcome after the next election of FF 35, FG 28, Labour 20 would be far more likely to see FG leading the next government, since Labour could not go in as a junior partner to FF, than an outcome of FF 20, FG 28, Labour 35, since, in those circumstances, Labour could choose who they like, and their supporters’ hostility to going in as a junior partner to FF would be irrelevant, as they’d be the senior partner.
There is every possibility that the former scenario will prevail, and that both FF and FG will move up in the polls, and Labour down, provided that they can last out beyond this year. Being drowned out by the current media hysteria, lots of positives are emerging in the economy. In the past fortnight alone, we have had: manufacturing output at all-time high in July and up 12% on July 2009 with every possibility that the August y-o-y increase will be simply enormous, merchandise exports in July up 12% on July 2009, retail sales up in August, new car sales in September almost double what they were in September 2009, the live register down 5.4k in September, the number of redundancies in September at its lowest since 2007 and 30% down on September 2009, a recovery in the number of foreign tourists since mid-summer, activity in the property sector recovering (if not prices). The media will try to bring about an election before these trends become more apparent to the electorate. The only negative economic statistic in the past fortnight was the 1.2% fall in GDP in Q2. This has produced an eruption of gloom among the ignorentsia, completely swamping all the positives I listed above. As I have posted on other threads, the Q2 figure was a freak. The Q3 figure will also be a freak, but freakishly good. That’s why there is such a clamour for an election now.
As I noted on another thread, this was the Minister’s opening statement in his interview about the July Live Register figures
“I think we should put in context, the figures traditionally rise, and have risen every year in the last 20 years in July.”
Do you think that this statement was:
I’m guessing you think (c) but others are more likely to pick the other options.
Apologies for the inadequacy of my reply. I’m on my way from Cardiff airport to Newport for the Ryder Cup. I am unable right now to listen to the RTE link you have kindly provided to hear the Minister’s statement in full. So, I am only going by the one sentence that you quoted. I will listen to the Minister’s full statement later and post again, revising my opinion if necessary.
Based on the sentence you quoted:
(a) NOT misleading – they do rise every July.
(b) NOT stupid – they do rise every July.
(c) NOT profound – as they do rise every July, it is as profound as saying that the temperature rises every July.
The phrase I’d use for what he said is: ‘statement of the obvious’
If he had used the term ‘seasonally-adjusted’ and said: “I think we should put in context, the seasonally-adjusted figures traditionally rise, and have risen every year in the last 20 years in July.” then I’d say that was both misleading and stupid. But, he didn’t use that term in the sentence you quoted. I’ll need to listen to the RTE link to hear if he used it elsewhere in the interview. But, if he did, it was certainly both misleading and stupid. But, innocent until proven guilty. I will need to the listen to the full interview to hear if he did say that. Frankly, I’ll be suprised if that turns out to be the case.
It all boils down to the statistical point of whether or not the CSO seasonal adjustments in the past two years for the summer months (when the figures rise) and the autumn months (when the figures fall) are any longer adequate to reflect the full seasonal effect, now that the numbers on the register are about twice what they were in the decade up to 2007/2008, when they would have been calculated. Both you and Kevin O’Rourke are assuming they are infallible. Not so, and no fault of the CSO, its a function of the statistics. Seasonal adjustment isn’t a simple matter, and seasonal adjustments sometimes go wrong. This is the second year in a row that the autumn months have turned out much better than the summer months, suggesting that it may have in this case. Some economists have been saying the same thing since the September figures were released on Wednesday (the Ulster Bank economist, for one). It would be good if some renowned statistician, like Dr Garret Fitzgerald, looked into the matter, maybe after the October and November figures are published and we see a clearer picture. I’d certainly be prepared to abide by his opinion.
If anyone wants to attack statements by politicians as ‘stupid’, which I’m all in favour of, then Joan Burton’s statement that the population would fall by half a million in 2010 is a far more clearcut example.
The listeners to the radio show had been told about a large increase in the seasonally adjusted unemployment rate. The Minister was asked to comment and then he said “I think we should put in context, the figures traditionally rise, and have risen every year in the last 20 years in July.”
Apparently, you can’t or won’t see why this was an inadequate and misleading response. So be it. I won’t be wasting any more of my time on this nonsense.
@JtO – “If anyone wants to attack statements by politicians as ’stupid’, which I’m all in favour of, then Joan Burton’s statement that the population would fall by half a million in 2010 is a far more clearcut example.”
2010 isn’t over yet John. You just never know….. you’re the one who likes everything fact-based. Always best to leave things like that until it is absolutely shown to be true/false. Where did you actually see it documented btw (that she had said that)?
I’m not saying you aren’t going to be right…. but I thought Liverpool were completely out of the Champions league final the other year when they were 3-0 down to AC Milan at half-time and looked what happened then. But you like to watch golf and I don’t know the game well enough to be able to quote any spectacular turn-arounds in that sport.
cont’d – personally, I’m a Leinster rugby fan and I’m expecting to lose by about half a million points to Munster tonight based on current form…. but I could be wrong.
I’m a Labour Party member. I have no ‘inside track’ with anyone in any of the political parties.
As for what happens next, I wouldn’t hold my breath waiting for an election within the next six months. And I’d lay a bet that Mr Kenny will step aside from the FG leadership sometime in the not too distant future. Post the next election, I don’t see FF making any alliance with Labour of any description; FF will want to regroup and get a few bob together and a new profile with the electorate for the good fight ahead as they would see it anyway. But like Joseph above, I could be all wrong – Leinster made some beautiful moves to beat Munster fair and square last night.
Meanwhile, I think that a lot of commentators make a mistake when they suggest that Labour is the captive party of the ‘trade unions’. I think it’s broader than that. Labour is more the party of the public service; including catergories of voters who are dependant on public services plus recipients of state social welfare payments and public service pensions as well as public sectors employees themselves. Nor is it so much that these voter categories expect Labour to protect them from cuts in services, salaries, incomes and jobs – though there is an element of that – it is that they perceive that the Labour leadership understands how they feel and reflects those emotions more effectively than FG or any other prospective party of government (FF being toast and all that).
The 4 year Budget plan effectively puts the economic cat amongst the political pidgeons. We don’t need an election; we need our political class to forget about themselves and their career ambitions and do the flaming job they’re already very well paid to do.
‘inadequate and misleading’
The original charge against the Minister was that his statement was ‘stupid’. I defended him on that one. Now, the prosecution have reduced the charge to one of ‘ inadequate and misleading’, which carries a lighter sentence. I think he should plea-bargain and plead guilty to the lesser charges, if only to get the thing over with. It was clearly inadequate. An adequate response would have been to go into the minutiae of the concept of seasonal adjustment, as I did in my post, but RTE would probably have lost their entire listenership within 2 minutes if he had. And it was misleading to those unaware of the minutiae of the concept of seasonal adjustment. But, ‘stupid’? No.
Sorry about your rugby forecast. So, only slightly better than Joan Burton’s. In Ireland the ‘year’, as far as migration figures are concerned, is April to April. So, the final whistle has allready blown on Joan’s 2010 forecast.
I am surprised to hear that you are a member of the Labour Party. You seem much too intelligent. Still, no one is perfect.
Any 4-year-plan, whether enacted by FF, FG, Labour or whoever, is not worth the paper it is printed on, unless the forecasts for growth, exports, migration etc contained in it are reasonably accurate. As I have pointed out on numerous occasions here, the quality of forecasting in Ireland in relation to forecasting these variables is abysmal; forecasts for GDP in 2010 this time last year were for a fall of -3% to -4% in GDP, now they are for +1%, Central Bank and ESRI forecasts this time last year were for a fall in the volume of exports, now they look like being up around 10% in 2010; in July this year ESRI forecast net emigration of 75k in the year to April 2010, it turned out to be 34.5k, even though their forecast was made after the year in question was over. The idea of a 4-year plan being prepared by these people is laughable. You might as well hire Joseph to forecast the rugby results for the next 4 years.
“In Ireland the ‘year’, as far as migration figures are concerned, is April to April.”
Says who? The CSO uses that period, but makes explicity clear that it does. It has never been established that anyone else uses that convention. If it is not stated otherwise – one must assume it is the calendar year.
@JtO – “You might as well hire Joseph to forecast the rugby results for the next 4 years.”
Hey, at least I was only out just under half a million points (and I had the satisfaction of seeing Leinster get the win), not out by billions. My rugby forcasting is still probably more accurate than saying things like… it’s the cheapest bank bailout in the world or… that it will only cost €4 billion to bail out Anglo.
General election November 4th.
After reading Karlś article and the Ministerś statement I would not be surprised if there are certain FF advisers pushing for a “snap” November 4th election called at the latest possible moment.
After that a March (2011) general election is also a strong probability but by then I am not sure it will be a FF choice but an internal Government collapse which is inevitable over the next 18 months.
Very good thought provoking article!