Randy Wray is a prominent economist writing in the post-Keynesian tradition, and is very prominent in the debates online around Modern Monetary Theory. He has an intriguing paper on a jobs guarantee scheme for Ireland here. I’m sure our readers will have lots to say about this proposal, and it is welcome food for thought.
53 replies on “Wray: Jobs Guarantees and a Proposal for Ireland”
I completely agree with the idea of a jobs guarantee system in Ireland (combined with a lowering in social welfare rates) and have discussed the topic with several angry taxi drivers over the past year.
There are clearly tens or perhaps hundreds of thousands of people in the country whose skills and ambitions are deteriorating with the recession and would jump at the opportunity for a job. On the other side there are tens or perhaps hundreds of thousands of people in the country who could work but either chose social welfare as a lifestyle choice or have never really been integrated into the working world. A jobs guarantee system is the one way to differentiate between the two groups and set their remuneration accordingly.
He seems to be suggesting we fund expenditure by running two currencies in parallel –
the Euro and a locally issued one, either in the form of a fiat currency or the government giving tradeable bonds instead of Euros in exchange for services.
Could we become the first country in the world to experience simultaneous deflation and hyperinflation?
“hundreds of thousands of people in the country who could work but either chose social welfare as a lifestyle choice”
Err no. There aren’t.
This jobs program proposal is the focus of a nasty split between MMTers and Cullen Roches MMR.
The crux of the matter in my opinion is the import problem when you get such a large increase in demand for foregin products or fuel.
The sad fact of the matter is that many of these new jobs would result in greater imports then what they now produce with people driving to work etc etc.
Indeed I think many existing jobs are net negative to wealth at the moment.
We were better off with sub 50 acre pre EEC farmers me thinks – they were at least marginally productive in a less energy intensive world.
Back in the day I proposed that Ireland invite over a few hundred Dutch market gardeners(its a labour intensive business I gather) with some experience and give them free ghost estate land to farm and such.
But this would involve the crystallization of losses I suppose and is a non runner in this strange fiction we live under.
“Err no. There aren’t”
Perhaps there aren’t. That’s why I said “tens or hundreds of thousands” (as a counterpoint to the point on those who would jump at the opportunity for a job).
I’m not sure it’s particularly helpful or additive to selectively edit my comment to make it appear to say something that I clearly did not.
Or perhaps you found the comment difficult to read?
Purely from a financing perspective, we’re spending €3.5bn on Jobseekers’ Benefit & Allowance this year plus we have, allegedly, ~€1bn in proceeds from State asset sales coming in the near future which would be quite useful for this type of scheme.
I like the idea from the perspective of it’s good for an unemployed person to be active insteading of sitting in a dark room staring at IrishJobs.ie et al for 7 hours a day. The literature on the psychological effects of unemployment is pretty clear in showing that it does long-term damage to a person and if we can do something that might combat these effects, then great.
What I’m unsure of is the question of what this will do for the job prospects of the unemployed. It may be easy to find work for people who used to be in construction but what about people who are qualified in areas such as journalism, the arts, etc? Ignoring the financial aspect, are they better-off doing piecemeal work which is unrelated to what they’re qualified for, or want to do, than being at home and jobhunting, reading up on their area, etc. You can call it a jobs guarantee but in reality it’s a glorified work for welfare programme and comes with the usual problems of these.
Also, any spending boost would at most equal the amount paid to workers beyond their current welfare entitlements. Hard to know if this would go to consumption or debt reduction. The Household Budget Survey first results are out this week, the microdata will be useful for that question when eventually released.
@ Stephen Kinsella
I expect L Randall Wray is well known about this parts, but just in case, I link to Wray’s ‘Crash Course on Hyman Minsky’ and Bill Mitchell’s Billyblog. Wray and Mitchell are working on a book together.
This paper strikes me as a fairly typical offering from the ‘progressive’ faction in the US (broadly similar to socialism or social democracy in Europe, but different only in that the US ‘doesn’t do socialism’).
And he has to have the requisite number of swipes at ‘neoliberalism’ which, given the extent, apparently, to which he is steeped in the history of FDR’s New Deal, is totally pathetic. It was a coalition of liberals and progressives that supported FDR as it was a coalition of liberals and social democrats that helped to secure the post-war settlement in much of Europe – and helped to moderate the social market model driven by ‘ordoliberalism’ in Germany and the too easily corruptible version developed in Italy.
The mutual mistrust, animosity and loathing indulged in by liberals and social democrats in Europe has permitted the emergence of a centre-right hegemony. Liberals are now generally found in coalition with the right throughput Europe. But social democrats could profitably ask themselves whether they are attracted there or repelled by them or a bit of both.
This Job Guarantee Scheme is the kind of thing that would have most genuine liberals tearing their hair out. This might be the Great Recession, but the world has moved on from the Great Depression. And, in a small, open, regional economy, labour in Ireland, unfortunately, must seek to replicate the mobility of capital. Employment-generating economic growth will only come from increased productive, allocative and dynamic efficiencies.
And what is worse, these kind of schemes deflect, and are intended to deflect, attention from the rent-seeking of the ‘aristocrats of labour’ in secure, well-rewarded, pensionable state, semi-state or quango employment – who have now become more capitalist than the capitalists themselves.
@ Paul Hunt
No disrespect. But did you actually read the article?
This seems only partly about a jobs guarantee, and more about running a seperate currency or some other form of QE (or simple fiscal transfer), no? Of the 17 or so pages, most of them are devoted to the problems of not having a “sovereign currency” and how we got into this mess.
My posts seem to be getting chewed up, so I’ll try without links.
Wray’s biog is on the Huffington Post.
He posts on New Economic Perspectives.
@ The Dork
I think I know the answer, and Wray is certainly concerned about the jobs programme leaking into imports – but what is so bad a bout some people with jobs spending a bit of their dosh (and for their kit) on imports?
Also, what do you make of the taxable punts as wages suggestion?
I did read the article; I just had my ‘bullshit-filter’ set at ‘high’. I could also have addressed the ‘how we can make you more like the US which issues debt in an/the international reserve currency’ which Mr. Bond picked up, but my bullshit-filter probably woudn’t have coped – and Stephen Kinsella highlighted the Job Guarantee scheme in his post.
@ Paul Hunt
I, also am a bit confused. You say:
“And, in a small, open, regional economy, labour in Ireland, unfortunately, must seek to replicate the mobility of capital. Employment-generating economic growth will only come from increased productive, allocative and dynamic efficiencies.”
Do you mean its on your bike – or on your Ryanair – time?
“Workers won’t have to leave their communities to seek employment. The program will meet workers where they are and take them as they are: jobs will be available in local communities and will be tailored to suit employees’ level of education and experience (though with the goal of improving skills). This will prevent communities and sometimes
larger cities from being deserted. Project proposals should include provisions for part-time work and other flexible arrangements for workers who need them, including but not restricted to flexible arrangements for parents of young children.”
@ Mr Bond
It is a notable feature of the MMTers that they do go on. They also talk sloo-oo-wwwly. They have a tone that implies only a dolt could fail to understand the correctness of their position. This annoys Karl Whelan. It doesn’t make them wrong though. I think Wray ran an interesting currency experiment with his students (student credit tokens), that was interesting reading.
@ Paul Hunt
OK, but your ‘bullshit filter’ has meant that you dont really engage with any of the ideas, arguments or concepts in this paper.
The commitment to full employment irks many economists but this is usually for ideological rather than empirical reasons. They rule it out a priori.
Wray makes perfectly clear that he understands the policy constraints facing Ireland to pursue a strategy of full employment – the most obvious one being that it operates in a foreign currency. He also recognises that a full basic job guarantee scheme is probably unaffordable at the moment.
Therefore he proposes a limited scheme based on these constraints. Why? Because it is in the interest of citizens. In a context where the state guarantees the full socialisation of private bank debt and the ECB is providing unlimited funds (over € 1 trillion) for failed banks to make a profit – this is hardly a radical idea.
Paint me as a heartless bastard if you will, but I’ve seen variations of these schemes and the main employment is for the ‘boys in the polished shoes’ who administer them. These are just another aspect of the utopian fantasy beloved of the left. And the irony is that they rarely amount to anything in terms of sustainable employment because the unions will make damn sure they won’t threaten either the terms and conditions of or existing employment. And these schemes are usually kicked off long after the problem has become really serious – like the Government’s Action Plan for Jobs with its 270+ actions, 15 departments and 36 state agencies and presumably a backing cast of thousands.
Schemes to support workers in employment during downturns and to re-train workers as various industries rise and decline should be a permanent part of the policy landscape – to be wound up and down with the business/economic cycle. There will always be a demand that ‘the government must do something’ – particularly when there is a serious problem – and some of these schemes might do little harm and might run the risk of doing some good, but a good dose of structural refrom would be the best way of boosting economic activity – and generating sustainable employment.
@ Paul Hunt
Most empirical evidence suggests that structural reforms (intentionally vague and fluffy term) makes little if any contribution to net job creation. Even the OECD have made this conclusion. So, the idea that structural reforms can solve our employment and economic problems are a ‘fantasy of the right’.
Most empirical evidence suggests that the job creation schemes outlined by Wray have a significant effect on net job creation. As pointed out by Wray, the WPA scheme in the US built 650,000 miles of roads, 78,000 bridges, fed 900 million hot lunches and created 475,000 works of art (the real fantasy of the left I suppose).
In more contemporary terms, such schemes have been very successful in Sweden, Netherlands and Denmark to name but a few countries. Historically they provided the central means to increase female participation rates in the labour force (the failure to operate such schemes in German ‘ordoliberalism’ has resulted in the dualised labour market).
No-one doubts the importance of supply side reforms in the labour market in periods of full employment. We need training, upskilling and enhanced productivity. But the times have changed dramatically in the past 4 years. It requires entering back into the dusty old domain of labour demand. Job guarantee schemes should be central to this.
I have no problem with a policy objective of full employment – it’s how that objective is implemented concerns me.
And what is this ‘foreign currency’? Ireland freely consented to pool its monetary sovereignty to create the EMU and the Euro.
As for this ‘relative morality’ stuff with bank losses being socialised, I don’t do it. Two wrongs don’t make a right.
@ Paul Hunt
When a country enters a monetary union they lose the capacity to issue debt in a currency over which they have control. This means that they operate in a foreign currency. It is why the Spanish government pays 200 basis points more on its ten year bonds than the UK government despite the fact that its debt and deficit are significantly lower than those of Britain.
Why? Because the Spanish government does not control national money policy. It cannot force the ECB to buy government debt. The UK can. This is the core argument of Paul de Grauwe and not very controversial.
I am not talking about relative morality. I am talking about hard economics/resources. If the ECB can pump €1 trillion into a failed banking system without a concern for moral hazard then the same liquidity can be provided to sovereign states who can subsequently find the financial means to give people a basic job – if they have the political will to do so.
It is that simple.
The whole point of a sovergin currency retrace is to reduce our money exports so that we can tax a then higher amount of domestic money.
We will spend more on fuel this year then ever before despite having less cars on the road.
This is because some people have enough money to drive around and spend euros on expensive fuel and some people can’t afford a bus.
So you get a dramatic misallocation of resourses despite and indeed because of the euro austerity.
Within the euro It would be best for CIE to give free token money for transport then to try and make a profit on routes as from a macro economy perspective half empty busses are a waste of scarce resourses.
That is just one example as I tend to focus on Transport but I am sure there are many others.
But try to imagine a country under U boat blockade with not enough fuel / oxygen entering the economies blood vessels.
Would it adopt a laissez faire attitude to resourse provision ? – I think not.
Inside the euro we should look at increasing the synthetic money supply such as public transport tokens that will not increase or indeed reverse our imports.
Its either that or ration cards…………
The other goal of policey is try to encourage the import via tax policey of the most effiecent personnel capital goods possible especially in the event of a Punt reversion.
I suggested a new Tax A+ bracket for cars below 100g a Km and dramatically penalise A,B ,C etc.
(car technology has improved since 2007/8)
Or you could go commie I guess and state you can have any car you want as long as it is a Skoda Fabia Greenline.
I was doing fine until I got to “sovereign states who can subsequently find the financial means to give people a basic job”. One of the reasons that there is a centre-right hegemony in Europe which is preventing the ECB operating as a proper central bank is that too many states gave too many people jobs that might not have been basic but were extremely well-rewarded, secure and pensionable.
I wish it were otherwise, but, as I’ve pointed out on another thread, much of Europe has ended up pandering to the whims of right-wing or right-wing leaning voters in Germany and France whose moral sentiments are generally not well-developed.
This Graph is likely to become very familiar to Euro periphery countries withen the next few years.
This is what happened to Cuba when it got cut off from its Soviet more then 20 years ago now.
Don’t you think the Goverment should concentrate on getting capital goods into the country that will be useful on the other side of this malinvestment horror show ?
@ Paul Hunt, & Aidan R
Thanks for the discussion above.
I like the contributions of Wray/Mitchell because they concentrate on employment. In the same way that you, Paul, complain about the focus of the blog, I would say that not nearly enough is said on employment.
Briefly, Europe would be doing better if the ECB had two needles in its compass like the Fed: one for inflation and one for employment.
I have the current situation down as an (unacknowledged) balance of payments crisis, leading to a financial crisis, leading to a sovereign crisis (and ricocheting around) leading to an unemployment crisis – which seems to be last on the list of things to do anything about.
I welcome that the six-pack has at least unemployment as one of its signs that something is wrong in the economy – though I expect the what to do about that part of things is to make it worse. The first words out of Draghi’s mouth in a recent interview being ‘slash the minimum wage’.
Wray is clearly aware of some of the local issues and makes some interesting suggestions.
@ The Dork
Thanks for that – pick me up where I go wrong.
So the problem is that Ireland is exporting money, right? I assume by buying imports, paying off foreign held bonds, people moving money abroad, using imported fuels, going on holiday etc., – not sure which of these is the most important.
It would be better if Ireland was importing money – which means exporting goods and services, tourism and fuel efficiency, etc.
Hmm. Doesn’t the logic of your position suggest that Ireland might be as well to invest in local renewables – even if they are more expensive than oil -, as at least we are spending in the local economy and in the long run we have a lot of light, wind and waves?
Sort of on topic. Perhaps this Spanish Central Bank Paper on why contractionary economics are contractionary might explain the Spanish government’s recent actions.
Health warning – I’ve read the summary and skimmed it. But hasn’t the SCB been widely praised for fighting its own bubble?
@ Paul Hunt
On the contrary – the problem in Europe is not that there are well paid, secure and pensionable jobs (as if there was something wrong with this) but that too many people have underpaid, insecure, precarious and non-pensionable jobs. Precarity not security is the problem.
A core part of the crisis is the explosion in private credit. Since the 1980’s there has been significant wage restraint across the OECD (with the US and UK taking it to the extreme). Governments have been confronted with the dillemma of how to secure confident consumers with precarious work.
The answer to low wages was the creation of the credit card – leading some to conclude that ‘privatised keynesianism’ is a far better way to describe the past 30 years than neoliberalism i.e. in the 1970s government took on debt to keep the market ticking over. In the 00’s it was individuals.
Furthermore, a core part of the Eurozone crisis was the level and extent of wage restraint in Germany over the past 10 years. Holding down real wage growth was faciliated through the construction of dual labour market. The secure workers are in the export sectors covered by collective bargaining and encompassing employer associations (i.e. not the public sector) whilst the insecure workers take up a whole variety of service based employment (usually immigrants, young and female).
So, with all due respect, but to claim that the dysfunction of Europe (in terms of employment and economic performance) can be traced to people with secure pensionable jobs is total nonsense.
State based and public sector jobs have risen moderately across Europe in response to population changes. Most new jobs have been created in precarious service based domestic consumption. This has been achieved through de-regulation, flexicurity, unemployment or dualisation depending on country specific national labour market institutions.
Labour market precarity, low wage employment and the credit card phenomenon was an attempt to resolve a deep (and arguably irreconcilable) tension at the heart of all capitalist societies: how to ensure democratic security with the market allocation of resources.
Hence, the problem in Europe (and the financial crisis) can be traced to labour market precarity not labour market security.
Its a monetory problem – our currency has been non optimal since at least 1979 and indeed before but we were integrated with Britain at least – with Dagenham Yank wages flowing back into the country.
So afterwards we hoped to get structual funds for roads , farmers subsidy , the scraps from multinationals to sustain the unsustainable.
We can only invest in local renewables after we leave the Euro and real wages can be reduced without creating a debt implosion. – before that time we should use the strength of euro to import capital goods that will be useful on the other side.
If we somehow replaced the entire private car fleet with Fabia Greenlines for example our private car fuel use would decline to near 1990 levels.
The euro was always useful for importing capital goods – the problem is we imported the wrong stuff – hence the malinvestment nightmare.
Back in 1986 the country was full of small cars …….what followed was the oil glut – in 1987 the local & international banking system merely increased leverage to burn the stuff as quickly as possible.
That era is over once again – the capitalitist system needs to create a surplus before the banking system can waste the new surplus again.
Its a sick system of capital depreciation really.
When I see “with all due respect” I usually, and mostly correctly, assume the opposite. But I agree with the principal contentions you advance. I certainly do not subscribe to the idea that capitalists should receive carrots and workers should be beaten with sticks. I failed to highlight the distinction between the perception of many right-wing voters in the EU about excessive and costly state employment and the reality, but the dualisation of the labour market has been facilitated by governments both directly or indirectly via tri-partite (government, employers, unions) agreements or the cosseting of sheltered services.
I don’t agree that the tension you decribe is irreconcilable; it is a continuing struggle and challenge. Labour market ‘precarity’ is a symptom of deeper failures in democratic governance, the hollowing out of traditional ‘blue collar’ employment as a result of lower cost imports from emerging economies, a shift in the employee skill sets required, the failure of competition law enforcement to apply structural remedies and, above all, significant inefficiencies in the allocation and rewards for non-labour inputs to the production of goods and the delivery of services.
That’s why I keep banging on about structural reform.
Bad news from the IT
The sophisticated prosperous couple who were looking for a property 6 months ago are still looking and waiting for prices to fall further
I think a lot of us have asked the question before but perhaps you’ll allow me to ask it again. What’s to stop us issuing punts? In adapting the euro have we eliminated the possibility of having two simultaneous currencies? Is it a ‘hard no no’ i.e it’s in law some where or a ‘soft no no’ i.e. no government would have the balls to do it in case it was seen by markets as laying the ground for an eventual dropping of the euro completely.
@ Stephen and others
Thanks for the post and contributions. It’s great to see discussions around the issue of (un)employment.
This one is for you. Was it your good self that was skeptical of electric car technology, or am I mistaken? The 400WH/kg battery has recently become a reality, which could mean €20,000 (before subsidy) electric cars with 500km ranges in under 5 years. Perhaps Eamon Ryan wasn’t that crazy after all.
I hate those articles, the independent is really bad for them. They should have put another paragraph at the end of the article. ‘However many believe property is still a poor bet with the following issues often quoted:
risk free deposits offering 4%,
more income tax on the way,
stealth and property taxes on the way,
unemployment (particularly youth) disgustingly high,
property supply still high,
personal debt still high,
government debt still high,
risk of default still present,
the fear of credit developing in society especially among those with
family/friends who got burnt,
Re-possessions still to happen (unfortunately),
ECB interest rates to eventually move higher and
plenty more auctions yet to come.
The advice should be, don’t speculate, rent for two years and only consider buying if you feel it to be a family necessity. It is unlikely you’ll miss the boat, as there wont be one i.e. another bubble for decades. Also think hard about why you need to own a property, loads of families in Europe have lived long and happy lives without owning their own home.
@ Dork: Now that was a tad naughty of you to post up that graphic about Cuba. Please refrain from scaring (the shit out of) the chickens.
@ John Foody.: John, electric batteries are getting better, but there are physical (as in physics) limits. 500 km range? Jeeze John that would be some big battery and some small vehicle.
John, just in case you missed it (I am sure you did not) Ireland is not Nederland or Belgium – its kinda hilly in spots. I live on a mile-long avenue in south Dublin. It rises from 2 m above spring high-water mark to almost 90 m. You load up an electric vehicle with four adults and such-like; you will use up a lot of juice before you get to top. Personal transport (as we know and adore it) runs on a very versatile, very energy dense fuel. Absent this, its ‘ta ra’ time to personal transports as we love them.
We use between 5 and 7 liters of liquid hydrocarbon fuel per person per day. Chindia uses just over 1 l/p/d/. Assume all those Oriental folk decide to ramp up their usage by just 1 litre, just to have a better life, like – where are they going to get it? And what will it cost them?
Who will be in the market for a 40,000 euro vehicle when a unit of electrons costs x3 times the current (no pun intended)?
@ Paul Hunt
The only ‘structural reform’ that will solve our economic and employment crisis is structural reform of the value of the debt.
Our Base load is now Natural gas power stations in the main…….. so you will burn very valuable fuel , incur dramatic transformation losses and some transmission losses before that energy enters the electric car.
I can see that technology working in France where electricity is so cheap & abundant but not in Ireland mate.(its half the price of German electricity now)
If you are going to use electricity for transport well its better to stick it on rails to reduce friction losses or perhaps invest in a trolleybus for Corks Hills
Those buses burn a hell of a lot of diesel struggling up them little mountains.
PS check this out……….click on individual countries
Notice Iberia’s dependence on LNG as it is isolated from the Northern European pipeline system………. scary stuff……..
Good to see L Randall Wray get some exposure on this blog …
He was in Ireland some time ago – and had an Op-Ed in the Irish Examiner …. rec very little attention ….
He makes a lot of sense .. but the the empirical history of pragmatic radicalism on the island is probably against him ….
He is, of course, essential reading for any and all who go by the name of ‘macroeconomist’ ….
@ Dork: Has the Global Economy Become Less Vulnerable to Oil Price Shocks?
Not happy reading.
@Brian Woods Snr
“Not happy reading”
It always seemed logical to me. I expect the oil price will go even higher in a couple of weeks when someone tries to sink a US aircraft carrier in the Straits in a couple of weeks time. Then we will see a more immediate impact on the world economy. Non of this ‘following year’ lag. That’s for weeners. As Dork points out above, Spain will be feeling vulnerable.
The great irony for me will be if Greece does eventually find oil in its waters and everyone is begging for it. Ho ho bloody ho.
I wish this bloody blog had an edit function edit function edit function !
Sorry for going off topic.
I’m afraid you’re wrong. A Nissan leafs battery has 140 Watt hour per Killogram. The cars weight is 1521kg. It currently has a range of 175km. So the recently developed 400 W.h/Kg will give the same Nissan leaf, with the same weight, a 400km range.
The current cost of electricity and petrol/desiel would put running such electric car at about 10th of a petrol/diesel equivalent.
True that, we’re incredibly reliant on gas at the moment. Though today a lot of nights we have up to 30% of the power on the grid produced with wind, and on windy nights a lot is curtailed, i.e. Eirgrid literally stopping wind farms from producing due to too much wind power on the grid. Most people would charge their car at night. Electric cars have the potential to be a big benifical part to a smart grid, soaking up increases in power and generally smoothing out power usage.
Of course we could do with more security on our gas but perhaps fracking in leitrim will solve that 🙂
The high oil price is clearly calling the post 2008 recovery for what it is – a credit illusion – I expect another 2008 collapse or worse – killing the oil price once again but leaving us even poorer then in 2008.
We can’t hope to (via wage devaualtions) increase exports to each other any longer as it clearly is destroying wealth on a fantastic scale – although Punts is Irelands only choice if this darkness continues.
Well my views are well known by now and I don’t want to completly destroy this employment thread but almost all new European fixed capital formation should be in Nuclear and rail construction in my opinion.
Nuclear is unfortunetly not very labour intensive but horrendously capital intensive but rail construction & operation can employ many people.
(Remeber rail is generally more expensive because you need to employ more people then roads when operational – however it is much less energy intensive – our core problem)
I believe France is gearing up for a Massive light rail investment programme as Hinted by Sarkozy during his first campaign speech last Sunday.
France has hundreds of relic regional railways that are operated by either a skeleton DMU service , just a cargo service or completly out of service but almost all have not been cut to pieces by Roadworks given its post war Independent Gaullist & planning heritage.
So it does not require Irish Bubble construction money of 20 to 30 billion a year on Grot or anything like this on a French per capita level.
The 64km Nantes to Chateaubriant line is now expected to cost 200Millionish when completed in early 2013
So if this new Tram train programme ever accelerates – a modest 4 Billion a year programme could produce 1280KM of electrified line + vehicles a year for the cost of a cheap Nuclear plant(don’t mention the EPR……)
The car based economy is most definetly dead – its time the Germans recognized that fact and did something about it.
@ John Foody: Thanks for the update. I will await the Jury.
“…soaking up increases in power and generally smoothing out power usage.” I hope this is a Freudian slip.
We really do need (like immediate and urgent, like) to reduce and conserve electricity use for mass transit Perhaps the recent price increases (and tax thefts), together with the next rounds, will focus folk’s attention. We’ll see.
I am somewhat unsure about your Fracking remark. Phil Hogan was totally adamant about stopping folk allowing their personal outputs into the groundwater – so what’s with the millions of toxic water (that starts off as drinking quality) that we get as the output from Fracking. A little inconvenient fact? I’m a scientist John. I know what heavy metals and commerical detergents can do to organic life. It’s most unfunny.
@Dork. Note your comments. Thanks, and keep grinding the bastards. I hope they move before the brick flies off the table and removes their teeth. They sure as hell won’t see that coming!
The record of Irish public project management is very poor.
However, in the FDR spirit of at least trying something, the Government could start with a few pilot projects that would not be subject to a FAS style bureaucracy.
Such projects would ideally be managed by individuals with a strong track record, who are hired from the unemployed.
How about hiring all the unemployed as economists and giving them jobs in academia to come with solutions for full employment. They say if you have enough monkeys and time they will produce the works of shakespeare, so there is always hope. Really though, clearly any economist worth their salt can see that an economy doesn’t need full employment to satisfy everyones needs for food, shelter etc. We are just too productive for our own good! ~That’s why replacing social welfare with basic income or negative tax credits would be the only sustainable method to run a country. The whole means tested methodology has failed miserably to solve the poverty problem. A JG programme would be a disaster before it began. A duel currency however, has some merit but would need much more study. A local Irish currency for domestic payments but use euro for external payments. Pay people in punts but let them pay for their continental holidays in euros. Tax in punts pay in euro and default/restructure on debt
For me the jury is out on Fracking. My comment was born out of wishful thinking. It doesn’t appear to be fracking itself that has caused contamation to date, it ‘tends to happen closer to the surface when gas and drilling fluid escapes from poorly lined wells or storage ponds’
This sounds like something that could be solved by stronger regulation and better practices. Though I await the many more reports underway before making a final judgement.
I was refering to ‘Peak load leveling’ though my comment was admittently disjointed. It can be summized as follows: A proper smart grid with smart meters in customers homes combined with electric cars would have a real benefical effect on the Grid:
“The only ’structural reform’ that will solve our economic and employment crisis is structural reform of the value of the debt.”
You may well believe this; and I have no doubt there are many who would agree totally with you. But it is a delusion of the first order. Yes, the repayments on foot of the PNs will have to be re-profiled and re-scheduled – and that, to some extent or other, is under consideration by those who have competence in these matters.
But taking the next, even if they are long overdue, steps on the path to sustained economic recovery is entirely at Ireland’s discretion.
Yet every distraction available is sought out to avoid taking these steps.
I am delighted to tell you I was rung by Ciaran Quinn assistant to Peadar Toibin TD Sinn Fein at 11.20 am today to inform me that Sinn Fein will bring an Emergency Legislation Bill to the Dail on Thursday 22nd March next to address the scandal of the ruinous upward-only rent review commercial lease clause. This Bill will allow over-rented tenants market rents and help to save tens of thousands of sustanable Irish businesses and jobs. The Irish commercial property market was an organised cartel. This cartel were the economic terrorists who destroyed our economy.
@ Paul Hunt
It is a delusion to think that Ireland will make any real step toward economic and employment recovery whilst carrying the huge debt burden of private market creditors.
Structural reform is just a meaningless buzz word from the OECD, IMF and orthodox economic textbooks that attempts to reduce all economic and employment activity to the magic of markets (i.e. a one size fits all approach to the economy that must include privatisaton and de-regulation).
It assumes that industrial relation and welfare regime rigidities require flexibilisation to improve economic performance. However, almost every piece of research over the past 10 years has shown that there is no empirical relationship between de-regulated labour markets and performance. It is not trade liberalisation that matters but national instituional systems of innovation – the latter requiring a lot more than the magic market bullet.
On the contrary, it is those coordinated and social democratic countries with embedded collective bargaining regimes that that weathered the economic and employment storm better than more liberal market oriented economies such as Ireland, UK and the USA. Furthermore, these ‘rigidities’ that require flexibilisation acted as a counter-cyclical framework to avoid the worst excesses of what happened in market friendly Ireland/UK/USA.
Any serious discussion on how to improve economic and employment performance must be nuanced to the institutional context and public policy regime of the country under question.
@ John Corcoran
All the best with that.
You can ‘nuance’ all you like, but if the institutions, procedures and public policy regime are fundamentally flawed the domestic economy will sink further into the mire. But why should that bother those in secure, well-rewarded employment with defined-benefit pensions?
@ Paul Hunt
I am genuinely curious as to what exactly you mean. I mean what you are saying is a standard line in most of the Irish media/commentariat. But I have yet to hear anyone reallly unpack the relationship between ‘secure public sector workers’ and the ‘crisis in our domestic economy’.
You sare saying two things. Firstly, that people with well rewarded employment, secure jobs and defined benefit pensions have NO interest in reform? (I assume you exclude most of the academic economists on this site from the equation). Secondly, that these secure workers are the actual ’cause’ of the absence of reform.
Therefore, what you are saying is that public policy reform requires reforming the employment conditions and pay of secure public sector employees?
Now, if you produce one piece of evidence or research that supports this theory I will consider changing my mind. But I doubt you will. Hence it is abstract ideology that is driving the connection between secure employment and poor insitutional and economic performance.
I frequently encounter an ability to twist things, but you are definitely in the running to take the biscuit. I don’t recall mentioning ‘secure public sector workers’. There are numerous people in the private sector who fall in to the category I defined – upto the level of equity-holding management in companies and partners/principals/proprietors in the professions and other businesses.
And I’m not saying, or haven’t said, that all of these have ‘NO interest in reform’. But it should be pretty obvious that they have little incentive to have an interest in reform if it were to discombobulate them – and every incentive not to have an interest.
And now that you’ve mentioned these ‘secure PS workers’, and though the rewards/incentives for governing politicians are somewhat different, it’s necessary to look at the broad layer of the elected and the appointed who formulate, ensure the enactment of, implement, administer and enforce public policy and manage the delivery of public services. And, just for the record, I am NOT (and have previously and on many occasions insisted I am not) saying that “public policy reform requires reforming the employment conditions and pay of secure public sector employees”.
So, now that I have gotten things back, more or less, to the shape they were in before you started twisting them and making unfounded allegations, let’s look in very general terms at the performance, responsibilities and duties of this broad layer.
You do accept I presume that the conduct of fiscal policy, of local governance of planning and zoning and of bank supervision and financial regulation were seriously deficient and dysfunctional during the bubble period. Who was responsible for that? Yes, corporate governance was equally deficient and dysfuntional, but we don’t rely on ethical behaviour; we depend on the rule of law. The primary responsibility is with those who enact and enforce the law; not with those who seek to evade any constraint it imposes or to exploit any loop-hole available.
Has it ever entered your head that policy, policy administration and economic regulation in a wide variety of sectors continues to be as deficient and dysfunctional as it ever was in the areas of fiscal policy, bank supervision and financial regulation? It has proved convenient for this and the previous government – and the government-machine – to project the illusion that any deficiencies and dysfunction were confined to specific areas of fiscal policy and to bank supervision and financial regulation. And it has been possible to sustain this illusion beausse they have not been exposed to an event like the international credit crunch that exposed the rottenness of the banks – and they have been able to suppress or dismiss any critique or attempt to expose this persistent dysfunction.
So, yes, I am saying there is a connection between this broad layer of the elected and the appointed who formulate, ensure the enactment of, implement, administer and enforce public policy and manage the delivery of public services (with all of the appointed in secure employment) and “poor insitutional and economic performance”.
@ John Foody: Thanks for those updates and clarifications.
As far as the Fracking is concerned, I have lost all faith and hope in any assertions that ‘proper regulations, etc., etc., are even possible. The money costs of envvironmental protection make the enterprise un-economic. Our legislators, who are meant to protect us, are bought men. So best not to permit any such activities. The spokespersons, promoters and shills for Fracking are a bunch of lying sacks of s**t – unless they prove themselves (beyond reasonable doubt) to be otherwise. Which they cannot.
Thanks again. See you around.
That Wray article. Very odd. Pompous, opinionated pap. And who is the ‘we’ he mentions a few times?
“We: “The editorial we is reserved for Presidents, editors and people with tapeworms” [Mark Twain – allegedly]
Would it be easier to instead say that the state is the employer of last resort? And therefore, anybody who is capable of working has to contribute some level of their labour as part of receiving their wage (which is currently called ‘welfare’).
Sure – but you must appreciate capital / energy is by far a more dominant force then basic human Labour since the days of Industrial revolution.
If a person burns more capital then his Labour inputs what happens then ?
Can’t understand why there is not numerous market farms set up with spare land since this activity is still dependent on large amounts of unskilled labour.
Somebody out there in the internet ether is listening to Dorks……
Before investigating job creation schemes, what rules and regulations prevent people from getting jobs? For example in California, USA medical marijuana dispensaries, which were legalized at the state but not the federal level, were increasing in number rapidly, providing employment to many, and filling empty storefronts. The authorities are now shutting them down, causing unemployment. Yes there are many issues surrounding medical marijuana, but it was a source of employment, often in small economically depressed towns.
If I remember correctly Hyman Minsky came up with his scheme in the US of the 70s which had many schemes for restricting access to jobs. For example the regulation of airlines. The schemes to create jobs in the 1970s failed and eventually deregulation was the only way to clear the job market.
I would also watch out, you might get what you wish for. Jobs creation schemes include jails (which employ all manner of criminal justice types not to mention the prisoners) and the military. The experts at Wikipedia point out Ireland has an unusually small military.