Howlin signals economists to be hired for analysis brief Post author By Philip Lane Post date December 30, 2011 The Irish Times reports on this development in this article. Categories In Uncategorized 45 Comments on Howlin signals economists to be hired for analysis brief ← A tale of three countries: recovery after banking crises → Kilkenny Cats, Heterodox Economics and Economics Blogs 45 replies on “Howlin signals economists to be hired for analysis brief” Any urgent need for Dorks out there ? We happy few specialise in all things pointless & futile. Our Mission motto is………….. “YEE ARE ALL DOOMED ….DOOMED I TELL YOU, DOOMEDDDDDDDdddddddd.” Croke Park intact, no increase in taxes, no reduction in welfare rates, increments still being paid, no change to super-inflated top level pensions, almost 3000 surplus bank staff continuing to draw excellent salaries. Oh, and no devaluation, we pay the bondholders and stay in the Euro. And no growth. What is there left to analyse? Except how long this charade can continue. What are the chances of them hiring somebody who’ll tell them things they wouldn’t like to hear? @Joseph Ryan +1 Presumably the way it will work is that the conclusions will be agreed in advance (about how wonderful is government policy) and then the experts will write the appropriate preamble of a report in each sector. Your right of course joseph Ryan : all economics is all macro. Sure that micro stuff… who needs it Here’s a Seasonal quiz: How many Principal Officers are employed in the Dep Fin ? @ Dave: zeroooooooooooooooooooooooo! No. 0 Kelvin, aka: Absolute Zero! @Dork: Apply anyhow. 8) I rem from my young days. There was this character that walked the streets of Dublinland with two sheets of ply slung across his shoulders with a pair of leather braces. On the ply was printed – REPENT, The LORD is NIGH, and other such worthy, moral exortations. Now the poor bugger would have to twatter! Or worse, he’d have to log onto to this blog! See yea ’round! Best for 2012. Brian. The department of finance has finally being exposed as lacking in competent economic capabilities by the Rob Wright review and told to do domething about it. Almost 35 years since a specialist economic planning department created under Martin O’Donoghue in the late 70’s Minister Howlin is revisitning that territory. Joe Lee and others documented the failure of that department to achieve its goals due to continually losing turf wars with the depatment of finance. Finance didn’t like implementing the plans of other people. Planning was closed and tranfered into Finance. So the solution is to do a rerun of the Planning department that failed all those years ago. And again to keep the capability out of the hands of finance, so finance will be tasked with implementing and monitoring if not other plans then at least other peoples evaluated plans. I am not confident about this setup. I have had first hand experience of structures like it going badly wrong in several global multinational organisations. The idea is straightforward, the implementation will be devilish. It almost sounds like a Newt Ginrich plan… or Monthy Python… “If we want to achieve our goal of world domination within 5 years, we need to take out the Roman Empire in the first 18 months, and lets not kid oursleves the Roman empire is the big one” Still though, great to see something done about problems that have being recognised since before I was born and ignorance off contributed greatly to the disaster we face. Desmond Brennan In 2009 there were 59 : http://www.finance.gov.ie/documents/publications/reports/2009/Dfincapacityreview09.pdf Presume a few less now. But, its not the numbers : that internal review (chart 10 p 59) noted that 20% of Principal Officers had degrees in Economics (v 38% arts). Indeed, from Appendix 9 only 25 staff seemed to have masters degrees in economics ; thats less than the numbers that had Masters level degrees in Arts and Public Administration. Desmond Brennan Fast forward to the latest review : Fast forward to the latest review http://www.finance.gov.ie/documents/publications/reports/2011/deptreview.pdf “On people, the Department needs to increase substantially its numbers of economists trained to Masters level or higher and add other technical capacity, especially accounting, banking and financial markets expertise. Over the next two years the Department should double its number of economists trained to Masters Level. It should organise itself to engage more University recruits at that level every year” And thats just one department. Are there professional labour economists employed in Education or Jobs or Social Welfare depts? Health economists in Health? Economists with expertise in natural resource economics in Public Works or Agriculture? Simply lumping a dozen or so MA qualified economists under the wing of Robert Watt (who is himself a fine economist with some non cs experience) is not going to solve the lack of economic analytical skill across the cs as a whole. @P II The number of PO’s in Dep Fin is scary…almost none have experience/quals in Acc/Fin/Econ…the accounting ‘standards’ they impose are something like GAAP 1960’s… Dep Fin is the serious bad apple in the Irish Civil service. Any takers on count PO’s ? @ Phillip II And, indeed, how many postgraduate economists are on the Boards of banks? Mr Howlin is responsible for the Croke Park Agreement which allows for the redeployment of staff to other areas. There seem to be a large number of economists employed in our third level sector all very highly paid even though some of the institutions they are in are quite small and insignificant relative to universities in othe countries. Surely some of these people could be seconded to the government departments either on a temporary or permanent basis. Could someone do a head count of these economists and look at their effectiveness. By amalgmating some usiness departments economist could be freed up to ‘help the nation’ eg. DCU and Maynooth. Galway and Athlone or Limerick Universities. Lets see if this Croke Park Agreement is just a mirage, out there somewhere but not touchable. “Howlin signals economists to be hired for analysis brief” On bottom of the same page…. The government has already asked existing staff earning more than the official maximum of 250,000 to take a 15% voluntary waiver of pay”. Then, this beaute “It makes no sense in terms of administration, unless you have an expert [was not aware we had them] brought in for a particular purpose,to have subordinates paid more than chief executive officers” “That is the dialogue we have to engage in next year,” How civil of you my dear chappie! Now, don’t rush it I warn you! Oh! What a tangled web of polite insolvency we weave! This is just further evidence that something is afoot to boost the economic capability – or, probably more correctly, to create the illusion of boosting the economic capability – in the government machine. As usual, all we’re getting are hints of rumblings behind closed doors and we’ll have to wait until the fait accompli is promulgated. It’ll probably be the usual ‘government by decree’. The extent to which most citizens seem resigned to this is remarkable, but they probably find it difficult to conceive of a better alternative. And the political classes have absolutely no incentive to present them with one – and every incentive not to. I expect though that some of the ‘grown-ups’ here – and elsewhere on the higher academic perches – have a reasonable understanding of what’s going on and of what is likely to emerge. But they’ll stay shtum. Wouldn’t want to ruffle the feathers of this big goose when she might be on the point of laying a golden egg. @Dave. “What are the chances of them hiring somebody who’ll tell them things they wouldn’t like to hear?” Aye. There’s the rub. I think you have a good idea of the answer – slim to FA. But, even if their ears and minds were open to a bit of dissent and heresy, the chances of them hearing these things from Irish-trained economists whose principal work experience is in Ireland has a similar probability, since the most of those who teach them seem to find themselves unwilling or unable to speak out and the work environment in Ireland has always favoured ‘yesmen’ and ‘yeswomen’. I am not sure if hiring economists is sufficient. Anyone who watched Inside Job can see that big name economists such as Glenn Hubbard not only failed to stop ruinous policies from being pursued they actually cheerled them. If a David Begg was so easily bought, what hope for free Market economists? The economics profession was thoroughly coopted and many of it’s leading exponents were complicit in the disaster. What is needed is people who are unafraid to state their mind. A Morgan Kelly for a John McHale if you will. The patients are still in charge of the asylum. If the government were to get NAMA to hire another team of valuers, auctioneers, solicitors, consultants, developers, finance and other professional parasites, there would rightly be a bad reaction to it…. Even if they were to hire a team of Florence Nightengales to do wonderful work in health or education, there would be plenty of people rightly querying our ability to afford it… But hiring economists seems to have the effect of keeping the economists quiet. This initiative should be subject to the following assuming there is a permanent need for these economists 1) A business case for what these economists will do, how they will pay for themselves. 2) Make sufficent cost savings in their departments first, by firing an equivalent number of people to bring in the new recruits. The retirements being bought from the workforces should not be counted as they are already all counted for IMF reporting purposes. 3) Salary, pensions and other allowances published and brought into line with the rest of the workforce… defined contribuition..As economists Im sure they would understand 4) As in line with best practice in industry, a plan to manage out the bottom 10% of these new hires. 5) A review before the end of the employees review period which can shut down the program (and therefore let the new hires go at no cost) if the program is not producing the goods. They should also explore existing schemes to provide experience to people which can lead to getting a permanent job jobbridge.ie there are many companies and organizations using (some abusing) this scheme One set of rules for everyone If however, the government wants to transform its analysis efforts, may I suggest they ‘open source’ the raw data. The announcement, and the discussion hitherto on this thread, reveals the lack of radical thinking to deal with what is a radical national situation. The new structure of government has nothing to do with efficiency or any management theory in particular; it is a divvy-up to enable two ill-matched political parties give some semblance of coherence to their actions (or lack of them). In successful economies, problems are identified and the resources marshaled to deal with them, the distinction between private and public being minimal (the smaller the distinction, the more successful the economy). In Ireland, the public resources are hired on a permanent, pensionable basis, on the basis of re-stocking the ranks, as if the public service was an army of some kind, inevitably designed to fight the last war, not the next, with the skills of those permanently hired, if they had them at the outset of their careers, becoming largely obsolescent. Sticking in a few economists here and there is not going to remedy this situation. There has to be a sea change in approach, with problem identification (with open access to data as Garry points out above) being the guiding principle and a shared responsibility between policymakers and those that are going to be affected by the policies adopted. In Sweden, for example, and in other Scandinavian countries, there is a standard – and legally required – step in every bureaucratic initiative called “out for comment” involving consultation with all stake-holders. (Of course, they also have parliaments that function well). Such an approach would shine a light into many dusty corners in the Irish public service. The Yes Minister approach, an inheritance from the British public service, is alive and well and there seems to be no prospect, on present indications, of if changing @Garry Haven’t numerous banking reports already idenitified the need? @DOCM, “..and there seems to be no prospect, on present indications, of if changing.” So, are you, too, resigned to what I describe as ‘informed despondency’ – with the occasional flicker of outrage and bemusement? Despite the obvious and woeful failures in governance across the board that are evident – and an inchoate public desire for something better – it is perhaps the very worst time to seek to advance the kinds of reforms we, and many others, would like to see. In these straitened times, most people are focused on protecting or advancing their narrow sectional economic interests, in competition with and in conflict with all others. They would prefer to ‘play the game’ as it is currently run because they understand both it and how they might play it to their advantage relative to others. They are fearful of, and resistant to, any changes in the ‘game’ as these might disadvantage them or, even worse, advantage others relative to them and whom they consider less deserving. There is no recognition, and unlikely to be a recognition, by the majority of citizens that they have a common enemy in the relatively few subsidy-grabbers, regulator-capturers, market-riggers, rent-seekers and consumer-gougers. Many citizens gain some limited benefit from these activities, but it is far less the unearned gains secured by the principal instigators. And they frequently perceive they secure much greater benefit than they actually do and, as result, consider this worth defending vociferously. And what is worse, they totally underestimate the impact of the inefficiencies and deadweight costs that fall on them and most other citizens. But where ignorance is bliss, ’tis folly to be wise – and those who exercise economic power are very adept at ensuring this state of general ignorance is perpetuated. In the last hundred years there have been only two occasions when what might be described as revolutionary change occurred that was endorsed by popular consent. The power structure-changing intent of the 1916 Rising was endorsed after the event and the sea-change in economic policy initiated in the late 1950s secured FF considerable electoral dominance in the ’60s that reflected widespread popular consent – even though they altered significantly the economic power structures. The fiscal retrenchment and economic reform initiated in the late ’80s were simply a delayed remedy for the economic linacy initiated in the years from 1977. And they did not nothing to alter the fundamental economic or political structures. What is interesting is that both ‘revolutionary’ episodes were iniitated by people who were either appointed or self-appointed and were unelected, but who were responding to a deep-seated, but poorly articulated, popular desire, discontent or intent. There is no evidence that Irish people have the desire or ability to demand significant change in the economic or politcial power structures or to elect politicians to articulate this demand and to implement the required changes. There is no likelihood that this will be initiated by the current political classes – and certainly not from what you describe as these ‘ill-matched politcial parties’ whose primary intent is to exercise and re-secure political power. Nor should we expect it from the upper reaches of the ‘government machine’ behind it – unlike the late 1950s. And so we will have the continued perpetuation of this optical illusion. It is not the equivalent of being forced to ‘live a lie’ as under the totalitarian communism against which the later Vaclev Havel railed – and over which he and his people eventually triumphed – by seeking ‘to live in truth’. But it requires a continued suspension of disbelief and the absorption of huge volume of BS and results in huge personal and economic damage. @Paul Hunt I love it. Here is a paper by Claudio Borio of BIS on procyclicality from 9/2011. Sober and thoughtful. Probably discussed here although I missed it. http://www.bis.org/publ/work354.pdf @ Gavin kostick “And, indeed, how many postgraduate economists are on the Boards of banks?” I have often asked the question , and never got an answer, who was ‘Chief Economist’ at Anglo-Irish? Did they get by without one, or why would a Regulator be happy with that ? It kind of indicates an indifference to whether economic conditions in the future would allow their loans could ever be repaid. Why does this issue seem to be of no concern, when there is endless whining about the level of economic competence in the ~Civil Service?The simple answer to the dearth in the Civil Service is one you people are ideologically incapable of accepting. There was sinply great money to be got telling lies to the public in the private financial services industry, and the CS could not compete. I have seen it written down somewhere that economists from outside the EU cannot get visas to work here. Surely this should be reversed, and given the failures of the last few years, there should there not be a positive bias against Irish and all Anglo-Saxon economists in the recruitment process? @ Paul Hunt We have discussed this point before and I can only repeat what I said before; this time it is different! The Irish stew in which we were enmeshed at various points in our history since independence was entirely of our own making and of little interest to the outside world. We are now dependent on outside assistance. This is not the “kindness of strangers”, as many would have it, but loans in the broader interests of the countries advancing them. In short, as a member of a single currency area, we live in an inter-dependent world and the terms for the loans include being forced to adapt, belatedly, to the necessary disciplines involved. The matter has been taken out of the hands of our incompetent politicians which we were collectively guileless enough to elect. It seems to me also that you may be ignoring the many positive elements in the Irish situation e.g. major improvements in the area of tax collection (an issue divorced from that of the necessity to broaden the tax base). By and large, the Irish public service does well by comparison with other countries, the real problem being that salaries in the upper middle and senior levels of it were allowed to get completely out of hand. The politicians, because of the link established by the Buckley Report between the salaries of TD’s and the grade of Principal Officer, were complicit in this and still are in the matter of acting effectively to correct it. Reuters is running an excellent end-of-year special report on the 10 years of the euro. It is worth a look (including the slide show) as also the links I have put to the work of Professor Winkler of the Frankfurt School of Finance and Management at the end of the Bogenberg/Sinn thread of Karl Whelan. (There seems to be no market for what he is saying in the debate among economists, probably because he concludes that the the existential problem confronting the euro is political, not economic). http://www.reuters.com/article/2011/12/30/us-architects-currency-idUSTRE7BT0FW20111230 Happy New Year! @ Tim O’Halloran Umm, am I in the “you people” category? I would have thought not. @Gavin Kostick Sorry , I was agreeing with you @ Paul Hunt You and OMF are writing with originality and clarity which is a winning combination. Surely, your thought provoking comments must be striking a chord with anyone on this site that still has grey matter to spare over and above the nicieties of financial arbitrage and the woes of a collapsing Euro. I got tired of saying the banks were bust beyond belief and were never, ever too big to fail, I told everyone the European banks were stuffed full of impaired loans and debts they would not be able to refinance, that many of them will have to be allowed to go bust, that NAMA is a con job of immense proportions a veritable suicide machine for the economy on top of everything else. Far too few economists on this site appear to have any real interest in the functioning of society outside the gilded cage of academia where they have spent almost their entire lives. As for the prospect of the government employing more economists? Will they give Gurdgiev a job? Will they promote Morgan? I have said it once before on this site, yoiu only get offered a jobs if they are fully aware of the ‘advice’ you will be giving. In a way your ‘advice’ is already surplus to requirements. Remember these politicians are acutely aware they are playing an extremely dangerous game which has absolutely nothing to do with what is right for the good of the county. As it happens, what is right for the country is anathema to the interests of politicians and the mandarin class. Politics has become a parody of itself. It is the sickness that tries to cure its own disease. The bailout money will run out, the government will try to do another tawdry deal with the Troika. Call it Bailout II. They will try to cobble another Tammany hall ‘arrangement’ with Begg and friends but the private sector is already in revolt, granted not open revolt, not just yet, but the tipping point is fast approaching. Regardless, of what the usual suspects down at the ESRI or NTMA cobble together the only growth in this economy will be growth in the black economy, welfare payments and emigration. This time round, the safety valve of emigration will not work, concealing the true numbers of unemployed might keep Eurostat and AJ Chopra fooled but the festering wound in Irish society continues to weep. This is all going to end in tears, pensions will not be paid, salaries will not be paid, there is going to be a monumental breakdown in law and order in Irish society. I am convinced, that no amount of cronyism and beatific insider back scratching will prevent what is coming down the line. There will be a huge scramble by academics, who have tried to bolster the system to the N’th degree, those who are essentially in league with politicians, to jump to the Morgan Kelly side of the fence, so as to try and secure positions post upheavel. Happy new Year! @ DOCM Excellent posts. Really like the “out for comment” idea. This would make much more sense than Howlin’s proposal. But this would mean flattening the structure of the country and abandoning our love of hierarchy. Here’s hoping 2012 is ok Well the new year has started well. Stephen Kinsella has pulled the plug on a thread just when it was getting interesting: http://www.irisheconomy.ie/index.php/2011/12/29/dutch-bankers-bonuses-go-bye-bye-thanks-to-twitter/#comment-223042 Rule No. 1: for goodness sake, stick with the top-level macro, fiscal and monetary stuff; keep the focus on the evil foreigners who are doing Ireland down. Rule No. 2: and, even more importantly, don’t dig in to the micro levels of the domestic economy, especially the sheltered sectors; and, if you find you have to, be as gnomic as possible. Where is Shane McGowan when one needs him. Happy new year, me arse… Tim ohalloran “I have seen it written down somewhere that economists from outside the EU cannot get visas to work here. Surely this should be reversed, and given the failures of the last few years, there should there not be a positive bias against Irish and all Anglo-Saxon economists in the recruitment process?” I can assure you the that is not the case. At least in university and research areas there are many non EEA nationals openly hired and working here. Good job stephen closing that thread. More of that needed. @DOCM I accept that reform of our state finances is essential, but the Reuters article is typically silent on the contribution of the financial services sector to the Euro crisis. Winkler is very clear on the comparison to the 19th C situation in the US, anbd goes on to say: ‘ At the same time, it has to be acknowledged that the co-insurance mechanisms established today, ie the EFSF and ESM, are more fragile than in the case of US banks 150 years ago. This is due to the (1) the long-term nature of the liabilities to be co-insured, (2) the elusive character of the ‘asset’ backing these liabilities, namely the willingness of the taxpayers in the crisis countries to honour their commitments, and (3) the substantial moral hazard risks arising from both characteristics as well as the political environment in which the co-insurance mechanism is placed’ What he doesn’t say is that the EZ banks and insurers are unable to develop an adequate co-insurance scheme because they have destroyed their own solvency by participating fully in the Wall St derivatives binge. The toxic waste of the Wall St/ City of Londoncasino has then dumped onto the EZ governments. There is little acknowledgement of that sorry reality in the otherwise wide-ranging recent EU Financial Stability Report. http://www.imf.org/external/pubs/ft/gfsr/2011/01/index.htms Bottom line. There are no clean hands or ‘responsible parties’ here. Fiscal crises cannot fairly be analysed in isolation from the egregious errors and malfeasance of the financial sector. These ‘players’ have bought a lot of influence on state institutions, including the the ECB, so we can expect the stream of spin and half-truths to continue. As Robert Browne outlines above, things may have get very rough before there is a political will to clean those stables. I think many people care less and less what government decides to do to improve DOF’s ability to curate the economy. It is perfectly legitimate for practicing economists to be better represented in state bureaucracies and employment and consulting prospects elsewhere are challenging. Good luck to all in that predicament. But I think the root problems that need to be addressed are mostly ethical and political – not to do with subject-matter expertise. Replacing embedded embryonic economists with more experienced ones does not really address that. I believe we face a decade or more of turmoil during which discredited authorities will be marginalised by citizens and those who manipulate symbols and forecast the future for a living – myself included – will face increasing pressure to demonstrate convincingly that their work delivers a strong financial return. @Paul Quigley, You are perfectly correct that the extent of the EZ banking and financial mess is being concealed, but this is primarily for political reasons because the leading politcial players, Pres. Sarkozy and Chancellor Merkel, need to shore up their domestic systems before they can ‘do what’s needed’ for the Euro. And with both facing elections (5 months and 21 months) they are struggling to confront their voters with the reality of what needs to be done as they know well that if the full truth were revealed the fury of the voters would be uncontainable and their chances of re-election would be shot. And, in France, Marine le Pen is poised to make hay. My sense and hope is that these politicians will do what needs to be done, but there is absolutely nothing Ireland can do to influence this. Colm McCarthy has a characteristically clear-eyed view in today’s Sindo: http://www.independent.ie/business/the-euro-currency-lets-start-again-2977111.html It is accompanied by, from the Government’s perspective (assuming his utterances were cleared by the High Command), a typically disengenuous and self-serving piece by Minister Varadkar: http://www.independent.ie/opinion/analysis/biting-off-your-nose-to-spite-your-face-is-rarely-a-good-strategy-2977002.html It is a particularly nauseating read – and one that should provoke any genuine democrat into action – but it makes it clear that Ireland will have no option but to accept whatever emerges from these EZ political machinations. While accepting that his draft may have been butchered by a sub-editor this piece of BS really takes the biscuit: “Austerity alone is not the answer. I think the biggest challenges for 2012 will be explaining our economic policies to the public, and the referendums. That is where we must focus all our efforts.” @ Paul Hunt The main point that Winkler is making is that the governments of the Euro Area introduced a form of co-insurance – recognising that their banks were incapable of doing so for the reasons you outline – but did it in a manner that was so contradictory that it compromised the very objective that they were trying to achieve viz. the restoration of confidence. These contradictions have now been largely removed (other than the continued effort to apply PSI in the case of Greece). Going through the German press this morning, it was striking to see how the political class uses, as in Ireland, the popular Sunday media to put across major messages. The general impression given is that the euro is not in crisis but that the finances of several governments are and sufficient means can, and will be, made available to overcome this. The ground is already being prepared for finding the required cash from Germany in March. A change in relation to the labour market is also being signalled and from a most unlikely quarter. Seehofer, the head of the conservative CSU in Bavaria, has gone public to say that the extension of the retirement age to 67 and the “unforseen” growth in temporary and part-time work has made it too difficult for workers, over 50 in particular, to assemble a decent pension. He makes no bones about the fact that the Hartz IV reforms have been misused by German industry and that full-time employment remains his party’s main the objective. If industry does not act, there will have to be legislation. Now, that is a major change and suggests that electoral realities are beginning to strike home. It cannot be normal that a so-called beneficial reform – held up even as a model for other countries but with clearly falling conviction – should give rise to a website – http://www.gegen-hartz.de – dedicated to (i) informing and protecting those affected (i) its eventual abolition. The other interesting development is that a board members of the Bundesbank has gone public to say that, in the matter of bumping up the resources of the IMF – the €200 billion agreed in December – the bank would (i) still like a formal approval from the Bundestag (which maintains that the matter is for decision by the Bundesbank) (ii) could only contribute if the UK also did so, while not making the same condition as far as the US is concerned, saying that the UK has a responsibility as a member of the EU (which, indeed, it has). Given the strong position taken by the European Parliament with regard to the “fiscal compact”, uniting all the main political parties across Europe, the pressure on Merkel to do something to mitigate the impact of the mess created, largely by the grand-standing of Sarkozy, at the December summit must by now be intense. @DOCM, It is becoming even clearer that this ‘fiscal compact’ is simply a means of (1) compelling the PIIGS to also implement the internal structural reforms required and (2) providing assurance to voters in the northern EU states, in partcular, in Germany, that the PIIGS are resolved to reform and behave and then they might provide consent to loosen the purse-strings. Compliant governments are now in place in all of the PIIGS There is also an element of eye-balling major bond market participants along the lines of: ‘if you are in such a funk that you want to take us and our banks down, where will you invest much of your ‘good money?’. It is also a tad ironic, but perfectly understandable, that the CSU is looking to dismantle the wage repression introduced by a Red Chancellor (aka the businessman’s buddy). And, on another front, Germany seems desparate to engage Britain to counteract Sarkozy’s grand-standing. But Cameron is hamstrung by overwhelmingly ignorant popular opinion in Britain – an ignorance all political classes and their fellow-travellers have nurtured for the last 40 years. In any event, this is Irish Economy and whatever emerges from these grand machinations will emerge. Ireland must be sufficiently flexible and resilient to deal with whatever comes its way. But this requires not only fiscal adjustment, but deep-seated structural reforms (which the ‘fiscal compact’, in its inevitably clumsy manner, seeks to prompt). The Government is adamantly opposed to the latter. Richard Tol summed it up in his last contribution here before departing Ireland’s shores: “Although some had hoped that this would be an austerity-and-reform government, it has become clear that this is an austerity government. They’ll cut spending and raise taxes. The reform agenda has vanished.” (9:42 am, 23/12/11) I’m sure you understand the basis for my ‘informed despondency’. @Noneu I read somewhere that ‘Economist’ was taken off the list of needed skills late in 2008. I’m not sure such a list would ever apply to academic posts. @Gavin Kostick I still don’t know if Anglo had an economist on staff. Since the absence of economists in civil service is a matter of such consequence in this forum why the lack of interest in the far more relevant absence of economists in the bank that caused the whole mess. Unless there were economists and some sense of brotherhood forbids anyone naming them? We need to know if there were . What if one of them was writing opinion pieces for the IT or RTE . That would be farcical. I am mystified that no-one seems to care about the answer to this question. @ Paul Hunt Richard Toll is, of course, right. But the reform agenda cannot be pushed under the carpet indefinitely. That is my essential point. The numbers simply do not add up with the present trajectory. cf. the views of Varadkar. http://www.independent.ie/opinion/analysis/biting-off-your-nose-to-spite-your-face-is-rarely-a-good-strategy-2977002.html On the debate in Germany, the recent developments simply underline the fact that democracy is all about reconciling differences between interest group. We should not beat ourselves up too much on the existence of such groups. What matters is maintaining the debate on a factual and dispassionate basis. All signs are pointing to some revisiting of Croke Park and reduction in the wage bill. How do you impose wage cuts on public sector employees who already have permanent contracts stipulating their salaries? Even if a new contract is negotiated people can refuse to sign them? @DOCM, “The numbers simply do not add up with the present trajectory.” Agree absolutely. The demographics do not look particularly cheer-inducing; nor does the skill-base of many of those unemployed. In the absence of an export bonanza from the MNC ‘enclave’, (which is unlikely given that the life-cycle of the earlier investment surge is coming to an end and the ‘free-riding’ tax regime has probably been fully exploited – and is coming under external pressure) I wonder where the economists here think economic growth is going to come from – other than from increased efficiency and productivity in the production and delivery of goods and services that final consumers value (either individually or collectively). The medium term real GDP projections generated by all the official bodies give the impression of being plucked from the sky, with fingers crossed and lack any discernible evidence of objective – and micro-based – support. But the ‘boiling frog’ technique of scaling back these projections as the years for which they are projected are approached does not imply that the ‘brushing under the carpet’, generation of optical illusions and suspension of disbelief will be brought to an end. There is an entire ‘industry’ devoted to these activities. And these are the last people that will be unemployed – or re-deployed to do something useful. They are simply far too valuable to those who exercise economic and politcial power. Indeed, Minister Howlin’s murmers about hiring more economists will simply increase their ranks. “..democracy is all about reconciling differences between interest groups.” Agree again. But a parliamentary democracy means that a government may propose, but parliament, exercising the delegated authority of the people, disposes and government then implements. But, unlike most other EU member-states, this precisely is what we do not have. Government engages, and believes it is compelled to engage, directly with citizens and those representing their narrow sectional economic interests. The Oireachtas might as well not exist. As a result, government can only do one ‘big thing’ at the time as it has to devote so much resource to PR and spin. And this ‘big thing’ is austerity. We can forget ‘reform’. Minister Varadkar’s nauseating piece in today’s Sindo confirms this. And, yes, subsidy-grabbers, regulator-capturers, market-riggers, rent-seekers and consumer-gougers will always exist, but the task of a government and a parliament is to ensure as far as possible that they pay more attention to the efficient production and delivery of goods and services than to these activities. Similar to the Church of England, where the Queen is indispensible and God is an optional extra, for many in Ireland’s sheltered sectors their ostensible economic activities are simply a means to pursue these economy and consumer-damaging activities. Capturing rents is indispensible; producing and delivering goods and services efficiently is an optional extra. Tim A large number of people especially on thepropertypin.com and related areas would see the bank md broker economists as the problem. Now, I don’t subscribe to that but there are dozens of economists in he banks and brokerages. Here google is your friend. http://www.irishtimes.com/newspaper/finance/2012/0102/1224309715732.html @Eureka Presumably the salary of public sector employees would be cut the same way they were cut in 2010. Comments are closed.