I recall one civil servant (in a management grade) telling me that a side effect of benchmarking was to introduce a level of bitterness and resentment into his department over promotions. Previously, people moved very gradually up a pay scale and a promotion meant your new pay was the low end of a scale that was just slightly above the top end of your previous scale. With benchmarking a promotion now meant significant increases - from 20k up with the result that the Gen Sec was on 250k and the clerical officer on 22k all sealed with trade union reps and FF expressing satisfaction with the latest pay deal.

So I’m just sayin’ - no point blaming the SINDO for this.

I must have grown up in a different country, or a different century. This is a Harry Enfield sketch, not reality.
Tim O Hallorans point is, of course, obvious to anyone paying any sort of attention the last couple of decades. First the opposition was little more relevant than well connected, sandal wearing, greedy for free education communists, now its a well heeled public sector.
We can all play this game though. Do the modern right have anything to offer beyond a deluded faith in markets, an inability to look beyond the next business cycle and a clearly defined position on what they dont like? (the public sector, taxes, communists, sandals, nationalists, feminists, immigrants, political correctness rinse lather repeat)

the flash foolish private sector wide boys who lost out due to their lack of education, class and breeding… The good solid dependable, hardworking, genteel but poor public sector, who come from the right stock and could be captains of industry earning millions but who are the quiet patriots serving their country.

It’s all the fault of light touch regulation and a flawed monetary policy forced on the country by foreigners.. This allowed the lower orders to get ideas above their station, letting the genie out of the bottle….
the governing classes advised against it but didnt have sufficent power to regulate it…. Whats needed now is more power so they can save the Dell Boys from themselves…

The public/private sector divide was not “wheeled out after the crash”.

It was the entire case behind benchmarking, made by the public sector, during the boom.

You are right to point out that the public/private thing was really wheeled out after the crash (you have to admire the speed with which Denis O’Brien and Tony O’Reillys organs were on the ball).

Public service jobs were easy to get during the bubble but the bright young things that are now complaining about the cosseted public service turned their noses up at them, because they were perceived as lower-paid and offering no promotion opportunities. Now that the ugly truth of capitalism is exposed, these bright young things call foul , inwardly regretting their own earlier foolishness.

The idea that a clerk in the health service is somehow closer to a senior executive in the HSE , than to a call-centre employee is just nonsensical, but is the inevitable result of trying to discuss a capitalist society while denying oneself the use of the concept of class. You can, these days, write best selling sociology/economics dividing society into bread-roll eaters and curry-eaters, but you can’t use class as an explanatory category. It is like trying to eat a steak while denying oneself the use of a knife.

“The Netherlands have a good system of mortgage banks and have avoided our property ponzi schemes”

That appears to be true but, if I understand correctly, the Netherlands has a very high level of personal/private debt ratio to GDP.

@all

I see Finland and itś “prudence” has been mentioned quite a few times in this thread.
However it needs to be remembered that it is less than 20 years since Finland suffered a devastating banking crash which has presumably determined their fiscal policy ever since.
It is also less than70 years since Finland was effectively abandoned by what we now know as Western Europe.
Both of these events have left very powerful emotional legacies. Therefore we need,IMHO, to be careful when we use the word “peripheral” in a West European context.

@all again

Re “Troika” and democracy .

The “troika” who IMHO (were actually forced upon us in one of the biggest stchups ever pulled off in recent European history) may be able to advise us about fiscal management but they are hardly competent to give us any advise on democracy.

The Troika is fronted by 3 people representing the European Commission, ECB and IMF:

A) The European Commissioner is from Hungary which is currently in trouble with the the EU for breaching several Democratic princilple including the media and Judiciary,

B)the ECB is not a normal Cenral Bank by any Democratic(or otherwise) standards and hasa dubious credentials at the moment headqquatered in a country where 25 % of the population (and all of its current capital city only started to properly enter the democratic landscape over the last 20 years.

C) the IMF is fronted by an Australian which is a democratic country (largely influnced by British and Irish traditions) but is not involved in European public affairs.

IMHO we most certainly not repeat our hubris (with our fellow Europeans when it comes to “get rich property ponzi schemes” of the middle of the last decade) but we most certainly must be careful who we receive “lectures on democracy” from and not be shy about revealing how our form of democracy works .

Rating agencies

It will be interesting which of the four remaining EZ countries, that have not been downgraded, will receive a downgrade.
My guess it will be either Holland or Finland. There are aguments for both : Holland because of personal/private debt and Finland because of its peripheral location. If they both get downgraded than only Germany and Luxembourg will be left and very likely will follow very shortly:)

That was true.

And then there was benchmarking.

The current debate is meaningless because it is posited on the untenable assumption of the present situation continuing.

Fully agreed on that.

I am not saying that the divide does not exist but that it should be removed. The current debate is meaningless because it is posited on the untenable assumption of the present situation continuing.

Oppressive as it might seem to some, the Troika is providing Ireland with the support and shelter to get its affairs in order in a measured manner. It’s approach is far from perfect, but this is frequently the case in emergency situations. And it is bound by the rule of law. It is not its fault that these laws do not permit certian actions that might be in Ireland’s interests.

And it is bound by the rule of law?

That is open to question. The threat that the ECB would implode the Ireland’s banking, by refusing to accept collateral, collateral that is now freely and willingly accepted, would be considered outside the rule of law.
Outside the remit of the ECB and were it a private institution would be considered blackmail, a criminal offence.

@DOCM/ @Gavin.

The divide between public and private sectors does exist. The figures are there to prove it.
And yet a levy on private sector pension was taken and used not to create jobs, because there clearly were none created, but to continue to pay increments, bonanza payoffs and bonanza pensions to top public sector employees.
Coming from the left of politics, I find it particularly distasteful that public sector workers are ‘looked after’, especially at senior levels, while private sectors workers are mere pawns or collateral damage in a struggle for competitiveness, with the principal beneficiaries of the struggle being the PS employees who will hold onto their pay, their increments and their pensions. Failure seems to be rewarded even better than success.
It is an appalling apartheid that should shame its proponents and policy makers.
It is no accident that the policy makers, both political and senior PS are the biggest beneficiaries of the policies they are proposing and implementing.

It is a very real divide.

The divide and rule tactic only works because of the artificial distinctions between private and public sector in the first place. A doctor whether in private practice or in the employ of the state is doing the same job. The same holds true for an entire gamut of skills. There is only a very limited sector of the civil service where the old fashioned reasoning justifying its particular status still applies.

Not only is this question not being raised but there is a failure to recognise that the issue even exists. Apart from the presence of the Troika, the actuarial cost of unfunded pensions in the public sector will soon correct this blind spot.

Your analysis is one which is entirely appropriate for a typical economic cycle. I would share it.

The key point here is that that you have to recognise Ireland has left nice sine wave type cycles way behind. Think of it if you like as a sort of super-cycle, or even simple a chaotic boom event. The long ratcheting-up of PS pay and costs is not representative of the mean to which you can expect the economy to revert this time. It is time this point was accepted publicly by opinion-formers.

This is a classic divide and rule tactic.

There’s a boom bust cycle (and a reason to fear it).

During the boom:

To Public worker: “You are a boring sort of person (I mean a highly valued part of the social fabric), and for your boringness (I mean valued willingness to work for the social good), you should accept lower than average wages in return for your boringness (I mean valauble, but let’s face it non-productive labour), and ultimately you get security (because really that’s what you want isn’t it?) over, umm - the cash that everyone else is making! But you have security. And a pension, I swear.”

To Private Worker: “Good times! Aren’t you glad you’re a driven, highly achieving go-getting individual! You’ve got a personal pension, a personal programme and a personal straight-up line to the top. See those public sector workers? So do I and, walk on by, baby, walk on by. You’ve got guts, initiative, a career plan and you are the real contribitors to everything that is making this happen. Eat, drink and be merry for tomorrow we, umm…”

During the bust:

To Public worker: “The state has only so much money. How the hell do you think your wages are affordable? Of course you work for the social good, but you’re frankly middle-management who-ever you are, and the services that the public needs - this is public money now - must come first. Your labour is non-productive you know. I mean, we can get by without schools (umm, speechwriter check this, can we?), so why should you be paid more than your private sector colleagues. I mean, right now comparisons are all that count - and right now, you’re being paid MORE, and you’re boring so you should be paid less. So there. Also, but don’t say this out loud. If you are paid less we can pay you’re private sector colleagues less, and isn’t that better for INTERNATIONAL COMPETITIVENESS. So there times two. PS shut up about your mortgage.”

To Private Worker: “You’re fired. Clearly the state of the public finances is the issue, so, ummm, look I didn’t want to say this it’s the fault of the public sector workers - they’re wrecking the country through their insistence on government overspending (and want the pensions they signed up for, nuts eh?). And they crowded us out. Dammit. But you are still fired.”

Perhaps if you were to address the example I advanced which sets out the difference between perceived and actually economically damaging rent-seeking/inefficiencies and point out what you see as the flaws in my reasoning we might make some progress. If not, I’m sure there are other blogs that would welcome the propagation of your prejudices.

I realise I’m probably wasting my time highlighting examples like this, because most people either want to rant about the injustices imposed by the Troika or want to generate conflicts that allow the real villains to eccape scrutiny. And the real villains are adept at fomenting these conflicts.

The real villains? Semi states? Unions? The professions? What we need is more privatization and more leverage?

It is not clear to me who is supposed to be ranting here.

Where do we see real reforms there. In China for example you need to put up 30% cash and you are only allowed to own one home.

The Netherlands have a good system of mortgage banks and have avoided our property ponzi schemes; also the Germans.

“It will never be eliminated” Nope, not if you give up before you start to reform

I have no desire to create a dispute where there should be none, but rent-seeking arises in every form imaginable to reflect the ingenuity of humankind. It will never be eliminated; the best that can be done is to seek to minimise the extent and frequency of the most egregious and economically damaging incidences.

To the extent that politicians and policy-makers have any interest in pursuing the minimisation of rent-seeking, the focus has to be on tragetting and sequencing. This often proves a particularly knotty problem. If one assumes that politicians, policy-makers and regulators are serious about rooting out egregious and economically damaging rent-seeking (in itself a heroic assumption) the first problem they encounter is that the public perception of rent-seeking that is egregious and economically damaging is often very different from rent-seeking that actually is.

Just to move a little, but not much, from your public v private pay contention, the pay and pensions received by ESB management and staff has become a bit of a cause celebre. But - a point I have frequently made without evoking either opposition or agreement - cutting the pay and pension entitlements of ESB management and staff by, say, 10% would have a negligible impact on final prices. However, restructuring the ESB and using a combination of privatisation and increased leverage where appropriate could result in a 10% reduction in final prices.

The public tends to focus on the former, mainly because it is damaging to social cohesion in these straitened times - and perhaps the envy that is part of the human condition also plays a part, but I would focus on the latter. The targeting and sequencing should focus first on the non-labour costs and inefficienies that increase the cost of living and the costs of business - and the demand to protect existing pay levels.

Stripping out these unjustified costs would provide the basis for tackling excessive labour costs as a later stage.

I realise I’m probably wasting my time highlighting examples like this, because most people either want to rant about the injustices imposed by the Troika or want to generate conflicts that allow the real villains to eccape scrutiny. And the real villains are adept at fomenting these conflicts.

There is large area of agreement between us on need for reform. But not on skewed reform in favour of the rich. So far we have the 100 or so developers with loans upwards towards the billions on holiday leave getting paid by NAMA; a Quigley NAMA investigation team of 10 embarrassment that apparently works on ways to defer investigation/prosecution; the banking ‘elite’ largely in situ; no legislation to prevent cronies/bankers and politicians hijacking the taxpayer purse in guarantees with even the Bundestag brakes absent; the upper echelons of the public service on banquet payments to rival those paid at the highest levels in multinational corporations; politicians on pensions/expenses and salaries that would raise eyebrows in any other economy; quangoland still in operation.

Now the above unsalient facts rankle with your deficiency in your reform agenda and you rant above with this cyclops cyborg agenda you have. But spare the lectures and rant when it comes to hospitals/A&E’s, old people and schools being hit with your reforms.

Re “I realise that default and create havoc is your preference ”

A load of rubbish. Yes default. Yes to reducing unemployment levels to half those of ours; in Iceland they are at a stable 7.5%; yes to paying what we can repay and no to loans that get gorged upon by the banks and the financial sector and get paid for by taxpayers.

No to unstable austerity measures that are destroying this economy no to efforts being made to pump up the bubble ponzi scam again.

Yes, to a stable economy that isn’t debt ridden but can pay its way; that has implemented true reforms not the bullcrap reforms we see about us, which is only a device to hide those still suckling away. Grimsson’s financial reforms in Iceland would be a good place to start if this government were sincere about real reform.

What we have instead is an alliance between The Troika and the Irish Financial sector on how to squeeze Irish taxpayers to get German/French banks their money back and keep those who got us into the mess, the Irish financial and banking sector with their new FG/LB benefactors, in the money. Simples

Oppressive as it might seem to some, the Troika is providing Ireland with the support and shelter to get its affairs in order in a measured manner. It’s approach is far from perfect, but this is frequently the case in emergency situations. And it is bound by the rule of law. It is not its fault that these laws do not permit certian actions that might be in Ireland’s interests.

And the extent to which the Troika is allowing the Government to back-slide, particularly in the area of structural reforms, is certainly not in the interests of the majority of citizens - though it might benefit some narrow sectional economic interests in a highly inefficient manner. And it can’t, and won’t, interfere in the reform of democratic governance. That, quite properly, is for the Irish people to decide - though they seem to be almost entirely uninterested and are allowing themselves to be distracted by some ‘nice-to-have’ but inessential reforms that government favour to avoid consideration of some fundamental reforms.

I realise that default and create havoc is your preference - and you are perfectly entitled to hold that view - but the more you rant the less convincing or sensible it appears.

I hope that, in my various contributions, I have made clear that I do not favour a watering-can approach and that rent-seeking in whatever sector it is found has to be combated. But competitiveness requires a level playing field to start with. Until the penny drops that the largely artificial distinction between workers in the private and public sector (now taken to incude, it seems, the nationalised banks) has to be abolished, the necessary transformation of the Irish economy will not take place.

The government has to hit its target of 8.6% (?) for the deficit. The Troika are not interested in being arbitrators in respect of the political choices to be made (although it seems to have been forced into that situation with regard to Greece).

So we have to wait for the unelected Troika to create the ‘democracy’ for us that we were unable to create in the first place; then we get the chance to tell the ‘troika’ how to enhance ‘democracy’ here.

This takes subservient, compliance to a new level.

Humility my …. Reminds me of Peter Jackson’s refugee camp in District 9 Perhaps you need to show some humility
in your definition of democracy there.

http://www.youtube.com/watch?v=_BjWEn5yvmw&feature=fvst

Until then some humility and a recognition that Ireland’s dysfunctional system of governance was the principal cause of the current problems might be in order. And this could be coupled with a commitment to pursue the reforms required and to seek ways, with Ireland’s EU partners, in which the democratic governance and legitimacy of the EU might be enhanced.

Re. Colm McCarthy, “A premature and poorly designed currency union has been allowed to derail the otherwise successful European integration project. That project was moving ahead smoothly enough until the ambitions of the Nineties generation of European politicians out-ran their judgement, and they decided to bet the farm on a common currency project whose design deficiencies were widely criticised at the time.”

Often commentary makes a false association between the EU and membership of the euro zone. So, opponents of the euro are falsely labelled with accusations, ” atavistic,, and ultimately counter productive and damaging, nationalistic instincts are coming to the fore ”

I’m pro european and support the European Union but have profound objections to the euro because of its mismanagement and untenability.

It is hoped the european project may continue where it left off following its eventual break up.

The irony of Colm McCarthy’s comment above is not lost when one one considers his support for the fiscal ‘Compact’ and driving ahead with our membership of EZ, that is becoming more flawed and damaged by the minute

I am being a tad unfair. I sought to provoke the expected response from you. But I would not be so sanguine as to believe that what I suggested is not shared by many people in Ireland. This is the real tragedy of this EU crisis and which Colm McCarthy highlighted yesterday in this regular Sindo piece:
http://www.independent.ie/opinion/analysis/colm-mccarthy-if-there-is-a-vote-well-simply-have-to-say-yes-3010424.html

He puts it well:
“A premature and poorly designed currency union has been allowed to derail the otherwise successful European integration project. That project was moving ahead smoothly enough until the ambitions of the Nineties generation of European politicians out-ran their judgement, and they decided to bet the farm on a common currency project whose design deficiencies were widely criticised at the time.”

The common bond that slowly emerged from a commitment to ‘Never again’ in Europe, based on democracy and the rule of law, and informed by varying degrees of competition, co-operation and solidarity, is being broken. The atavistic, and ultimately counter-productive and damaging, nationalistic instincts are coming to the fore.

It is dispiriting, but inevitable, that we don’t have people more inspiring and convincing than van Rompuy and Barroso ‘to speak for Europe’. And it is inevitable because elected governing polticians will never willingly delegate power and authority and will do so only to the minimum extent possible and only to those whom they can bully and control.

It would be messy from a democratic governance perspective - but any properly functioning democracy is messy - but what is required is for members of the European Parliament to elect Commissioners directly from their ranks and to have these members of parliament answerable to, and taking direction from, their national parliaments in the same way that governments do - or do, at least, in the better-governed member-states.

“I wouldn’t travel as far towards the utopian, moralistic and self-serving left-wing position of dyed-in-the-wool Guardianistas.”

Paul, if you continue to wear the intellectual eye patch to prevent you seeing half the story you risk turning yourself into one of those sad FG/LB cyclops.

The government bailiffs are gutting the public service and cutting employment while ignoring the harbingers of doom for our economy; the financial services industry, the banks, NAMA and the financial services industry.

For example, NAMA was originally conceived to generate credit in the economy; fail. The bailout of the banks was conceived to generate credit in the economy: fail. Corporation Tax was not conceived to be a transfer pricing, snake oil device to falsely inflate our GDP complained of here by our German friends,

http://www.irishexaminer.com/ireland/bailout-should-cost-ireland-double-corporation-tax-131983.html .

Actually, lets face it, it probably was the brainchild of moralistic, self serving, dyed-in-the-wool pirates now in the cross hairs of our european partners who’ll strike when
they are ready

Maybe government needs to reveal its cyclops agenda of betrayal of the electorate who gave it the mandate to burn bondholders and get taxpayers money back; instead of roasting the economy on financial spits to squeeze more blood out of taxpayers to pay for the financial sprees of their fellow quisslings in the banking and financial services
industry

Re: “the extent to which the Government is committed to structural reform …”

Keep the debt repayments flowing.

Worth a good laugh

“And do I detect a hint that you might secretly desire a ‘Greek explosion/implosion’ so that the external ’support’ for Ireland might be totally recast in its favour?”

Instant reaction, is no, no, no, no. I would never, I hope, be so blase about the actual lives of our fellow citizens, by which I mean people, as to casually hope for a disaster for one nation so as to benefit us. Whilst I certainly would like to see improvements for Ireland, the long haul is the good of all.

Mind you, life and economics are complex. That is not to say that the Greeks might not have a happier future outside of the Euro. I would have to think more about it.