Amartya Sen on Austerity

An article by Amartya Sen in the Guardian on European economic policy  – link here

55 replies on “Amartya Sen on Austerity”

Sen wrote,

Sharp increases in inequality between regions can be remedied, to be sure, by large-scale migration within Europe (for example, from Greece to Germany). But it is hard to assume that persistent population inflow to the same countries would not generate political resistance there.

No prizes for guessing who will be the first of those to leave austerity riddled nations, such as Greece, in search of better opportunity. Hint: It will not be the Greeks, who are less likely to generate enterprise and employment – but the opposite – nations such as Germany will receive the benefit of waves of Greeks who are capable of generating wealth, through hard work, cunning and innovation.

You can see the same happening here in Ireland.

It is all of those folk, whom one would most like to see stay, for Ireland’s sake, who will be most likely to contribute in some way to economic re-growth – who are the individuals, who end up in parts of the EZ which are stronger now, even as we speak.

I have had conversations with folk who worked at community level in parts of the world, like where Amartya Sen himself comes from. They always remarked on that fact, that the condition of the poorest parts of the world, is greatly dis-improved, by the fact that they tend to lose those classes of folk, who may create opportunities and enterprise, if it was possible for them to stay around.

Our national broadcasting programs such as RTE PrimeTime, have focussed extensively throughout this financial crisis on trying to understand the books, and how we are going to fix the books. But there is precious little accounting carried out on the human capital end of it. BOH.

For example, serious consideration of the kinds of institutional reforms badly needed in Europe – not just in Greece – has, in fact, been hampered, rather than aided, by the loss of clarity on the distinction between reform of bad administrative arrangements on the one hand (such as people evading taxes, government servants using favouritism, or unviably low retiring ages being preserved), and on the other, austerity in the form of ruthless cuts in public services and basic social security.

This analysis strikes me as superficial, reacting to headlines rather than reality on the ground.

There is without doubt austerity but it’s not where Sen sees it.

Governments of the Baltic republics chose to accelerate cuts themselves and the UK is the one big economy in Europe where there has apaprently been a big austerity programme but UK government spending is more than £22bn higher than it was in 2008 when the financial crisis erupted. The majority of extra money required by ministers to fill the black hole in the finances caused by the recession is being raised from extra taxes rather than cuts in public spending.

Where in the Eurozone are there ‘ruthless cuts in public services and basic social security’?

Greece is reported to have added 70,000 public sector staff in recent years while public spending in Ireland is almost 40% above the 2004 level – –  not exactly a year of misery.

In Ireland bubble gains remain largely intact and The Irish Times today details some of the 800 public staff allowances costing €1.5bn annually including a clothes allowance so that press officers can be rigged out to match ‘well-heeled’ journalists.

TDs still get pocket money to pay for lunch etc at their place of work and some pocket more than €200,000 over a Dáil term, in a special tax-free allowance that was negotiated by ‘dependent’ TDs and Bertie Ahern in 1997.

Pay increases (increments) continue to be made in the public service.

Austerity in the private sector seldom makes headlines and in Greece doctors can protest because of losing their kickbacks from prescribing out-of-patent drugs but the real pain is felt by the unemployed and small traders.

In Ireland last year, Minister Michael Noonan imposed a levy on private pension funds and Taoiseach Enda Kenny undertook to investigate fee levels!

However, the austerity for those who face little prospect of payouts from occupational pensions or none for many who have no cover, simply doesn’t appear on the radar of those who have an unfunded public pension — Colm McCarthy has commented on the situation because he had to earn a crust himself in the private sector.

Jobs remain State guaranteed in the Irish public sector and in Spain it has been young temporary workers who have been the main victims of the brutal recession.

The farmers, the other politically powerful Irish group dependent on public funds, have done well in recent years with incomes rising by 50% in the past two.

Public subsidies (mainly from Brussels) amounted to €1.8bn in 2011 – – and guess what, the lobby groups are engaging with that craven specie known as the ‘rural TD’ to protect the third-level grants bonanza.

As regards, Prof Sen’s point on public involvement in decision making, there is a European Parliament which few give attention to and each country has a national parliament – – with possibly less members with a criminal record, than in his own!

MH
“Where in the Eurozone are there ‘ruthless cuts in public services and basic social security’?”

Why in Ireland of course. Net current expenditure is up nearly 700m y/y. It is savage, I tell you. We are still racking up quite a total of “non odious” debt.

“Intellectual confusion” between austerity and reform on the part of whom? The author does not say. The answer is at the level of the nations that make up the EA. The story is more or less the same in every country affected and the confusion is deliberately engineered to enable those in possession to remain so.

The “Kenysian defence” is a valid argument and genuinely held but often used to maintain the confusion; together with arguments such as causing division between public and private sectors or under the general banner of “protecting frontline services”. When a minister points out that if it comes to a choice between maintaining these or cutting expenditure on staff salaries, the latter is the moral choice there is an outcry!

The euro is a most useful whipping boy and its introduction certainly removed the safety valve of competititive devaluation. What is overlooked is that this valve was mostly used at the expense of other countries simply to maintain the status quo domestically. And proved ineffective in the long run. As Asmussen has pointed out, there is no silver bullet.

Again we have a ‘noted’ personage getting some digital ink. Bit waffley, but that’s our news-rags for ye.

1. Pseudo-economists: -1 + 2 + 2 = 5 … “its the numbers, silly!”

2. Real economists and dopey irisheconomy bloggers: -1 + 2 + 2 = 3.

That’s the math message which would take a few paragraphs to describe and explain the intellectual poverty of folk who fail to publicize their Economic Model-in-Use. Actually they appear not to even realise they have one. I regard this as shocking. Its in-excusable.

Why do folk need money? How will they get money? What will they do with money?

Pseudo-economists have to provide the answers to these questions – and have to accept (un-equivocally) that any economy is a complex and tightly coupled physical process embedded in a closed system with finite resources to support that economy. And being a physical system it has limits (margins in econ terms). These margins are guarded by real dogs with real teeth and very bad temperaments: the Laws of Thermodynamics. You stray across those margins and you WILL be savaged – as we now are being.

How long does it take for this little cent to tinkle on the floor? Well?

Reform in Ireland has largely focused on talking about money – allegedly either saving ‘it’ or getting better value for ‘it’.

Rarely if ever is this debate allowed to spillover into the big questions about the value given by the political system, the type of society underfoot, accountability for decision making, the quality of leadership and the excision of conflicts of interest. Consequently piecemeal reform initiatives collectively perform like a boat that can only tack to the status quo.

The PDs made an effort to shake things but their radicalism amounted to no more than pursuing an atavistic national desire to make Ireland the 51st state. They gradually fell under the spell of cronyism and patronage.

If you talk to anyone with a minister in their constituency, the main concern is whether he or she is bringing money into the constituency rather than the quality of work being undertaken ‘in Dublin’.

Economic growth, Irish style.

Irish Government to seize €433m from decimated private pension funds in 2012; Up to €900m to be taken in 2011/2012 and up to €1bn more in the coming 2 years

http://www.finfacts.ie/irishfinancenews/article_1024577.shtml

Average return on Irish Managed Funds 2012: ZERO

Irish group pension managed fund returns over the ten years to May 2012, have been a derisory 2.2% per annum on average, just above the
Irish inflation rate of 2.0% per annum over the same time horizon.

Less than half of the current managed funds outperformed inflation over this period.

The unemployment figures show a rise to just under 15%. That’s real austerity for those people.

Meanwhile the government announced a day or so ago yet again a jobs initiative – one of half a dozen or the same one since it came into office.

Is it inability or unwillingness at government level to think through a workfare program? Presumably one day son a group of experts (insiders) will be handed the task of coming up with some palatable blancmange policy on the matter. I could almost sketch out the profile of such a group as I write.

Don’t rock the boat please.

re – Brian O’Hanlon quoting Sen,
‘Sharp increases in inequality between regions can be remedied, to be sure, by large-scale migration within Europe (for example, from Greece to Germany). But it is hard to assume that persistent population inflow to the same countries would not generate political resistance there.’

There is a curious blindness or a deliberate refusal to accept certain qualities of society at play when the talk turns to the manipulation of population shifts as player-pieces on the gaming board of economic models (I’m not attributing it to you or to the Guardian journalist, though).
There is something intransigently wrong with forces that try to push migration – for gain or ‘solution’ – and ignore that it should not occur without the free-choice of the migrant and the freely-willing acceptance from the host community as a whole. Apart from the moral necessity, there is an inherent instabilty in outcomes that take no such account.

The plans of the engineers in these matters have come to be mistaken for, or at least valued as superior to the realities from which they were originally extrapolated. The Model is now hostile to it’s Original.

The problem is one of thought; a side-effect of abstraction that results in it’s extremes in acquisition without social conscience, and the kind of political wilfulness that is of one kind if not degree with the tyrant & totalitarian.
Looking at this (from the NYT last week), it is not hard to see the force at work beneath the false veneer or democratic pretence:
“Politicians have to lead,” Eckart D. Stratenschulte, the director of European Academy Berlin, said at a recent forum on the future of Europe. “You have to identify the aim, you have to explain it, and you have to choose the way, and then you have to go there.”
What is more deeply disturbing, and, for me, surprising, is the sheer number of people in this country who have been nursing a publicy-dormant but secretly industrious will to have the entire thrust of the development of western civilisation towards self-determination & democracy undone.
There’s still some half-hearted attempt to conceal what’s going on, for instance; in this morning’s RTE’s paragraph on the Monti/Merkel meeting, which originally included their statement that ”sovereignty is to be surrendered in return for debt-mutualisation”, which was removed two hours later from the piece.

But as much as it is insane for our govt. to think that they can sleepwalk the population into the dissolving of the State, europe as a whole is brewing up a huge storm for itself that will turn the stage-managed (however genuine it’s origins) financial crisis into a seeming tea-party.

The eye of the hurricane could even be in Germany – they have some recent experience in this regard, after all.
“Political union is code for a state,” said Peter Gauweiler, a member of Parliament from the Christian Social Union. “We can’t allow the central committee to migrate from Moscow to Brussels.”

re-DOCM
”The “Kenysian defence” is a valid argument and genuinely held but often used to maintain the confusion; together with arguments such as causing division between public and private sectors or under the general banner of “protecting frontline services”. When a minister points out that if it comes to a choice between maintaining these or cutting expenditure on staff salaries, the latter is the moral choice there is an outcry!”

But as was refreshed in our memory in the Labour Party documentary last night, the top-ranks of the Public Service have always been ‘political appointments’. Same for hundreds of quangoes. And these have been circuituously exempted from the brunt of recent attacks on pay.
All through the semi-states, there was a system of ‘double-management’ – literally two overseers of the same rank. I’d hazard a guess that a very many high up in the PS proper are entirely expendable.
Perhaps dealing with these might only have a small overall benefit (though the other case is not unconvincing), but it would be a damn good place to make a start.

One last observation.

Let’s give this damned lie the lethal injection it deserves for the last time, whether or not the particular strand in the ethos of the Guardian that refuses to see the resemblance between it’s touting of the EU & the general climate of complicity across Europe with Nazi annexations –
”The dream of the unification of Europe goes back at least to the 15th century, but it is the nastiness of the world wars in the 20th century that established its urgent need in our time.”

– WWI was planned for decades, with the expectation that the ‘winner’ would assume the mantle of leader of the consolidated europe.
The 1930 saw a more direct approach. The EU, through the side-door secrecy, is the heir of the same pathology.
The ”World Wars in their nastiness” were not the cause of the problem but the result of the ambition.
As one commentator to the article rightly attests; look at Yugoslavia if you want to see the dangers of a forced Union.

”It is important to appreciate that the movement for European unification began as a crusade for cross-border amity and political unity, combined with freer movement of people and goods. Giving priority to financial unification, with a common currency, came much later, and it has, to some extent, started to derail the original aspiration of European unity.”

– Recent documents show the single currecy on the drawing board since the early fifties. And political unity was never wanted, still less now. Perhaps the journalist isn’t sympathetic to the Indian National movement, but even a modicum of familiarity with Gandhi should be enough to warn him against the presumptuous nonsense of his article.

The Guardian, in pitting itself against the xenophobe tendencies at the other end of it’s market, has attached itself quite deeply to the EU project, and has a lot to lose; so it should come as no surprise that we’re seeing the scrambling to miscast history to limit damage. In the absurd game of ideological goodies & baddies, they should remember that stupidity uses a coin of two faces.

resemblance between it’s touting of the EU & the general climate of complicity across Europe with Nazi annexations

The bald fact that there is no comparison won’t deter feeding the exotica in the conspiracy theory zoo.

@MH

“Irish group pension managed fund returns over the ten years to May 2012, have been a derisory 2.2% per annum on average, just above the
Irish inflation rate of 2.0% per annum over the same time horizon.”

How much in tax concessions did the exchequer grant the pensions business over the period?

Re – Alchemist

Do you dispute the relation between the forced unification ambitions of the Nazis & the EU, or merely the lesser evil that most professional commentators are duped by their fear of appearing ‘illiberal’ ?

@Vbarrett

“Isme, described the unemployment figures as “a disastrous new high”, and called for the Government to adopting enterprise policies to push Ireland to the top of the enterprise league, including a reduction in Government influenced business costs.
“Unless significant changes are made to the welfare system, many of the long-term unemployed will simply remain on the dole,” chief executive Mark Fielding said.”

Here is what Anglophone welfare reform looks like

http://www.guardian.co.uk/society/video/2012/jun/20/human-cost-of-welfare-reform-video

@ seafóid

How much in tax concessions did the exchequer grant the pensions business over the period?

I’m concerned for the large number of people who have the same tax rules as on employee contributions from public sector workers.

So the tax benefit treatment is no different to that on PRSI contributions.

For private sector workers, concessions on lump sums may not be very relevant if the fund is would up or benefits cut.

As for benefits for fat cats and athletes, that doesn’t concern me. There is a lot more flexibility generally on investments for such people etc.

Recent budgets have cut the benefits that were available to them.

If pensions can be in such a bad state, how are the government sustaining the guaranteed investment products ( which have become hugely popular since 2008 ) – the two with An Post are I think 7 % for three years, & 15 % for five

…actually, 10 & 21 % respectively for the three & five/half yr, tax free.
And the solidarity bonds are 50 % after ten yrs., but taxed.

re- Seafóid

…though ISME don’t want the lowering of the minimum wage they’ve been lobbying for to be shown-up by comparison with the dole.

France
Austerity that dare not speak its name
4 July 2012 PresseuropLe Monde, Libération

“A just recovery”: the French Prime Minister has invented a euphemism to avoid the inflammatory impact of the more usual term of “austerity”. On the occasion of his 3 July general policy speech to the newly elected parliament, Jean-Marc Ayrault acknowledged that “efforts” would be necessary but denied that they would amount to “a change of direction”, notes Libération.

Two days after the publication of a Court of Auditors report which spoke of the “imperative” need to reduce France’s deficit to 3% of GDP in 2013 – a measure that will involve cuts worth 33 billion euros – the daily remarks on the “fine line that separates the “national effort” demanded by Ayrault and “the austerity” that he claims to oppose”.

http://www.presseurop.eu/en/content/news-brief/2294621-austerity-dare-not-speak-its-name

Merkel in Rome

Chancellor Faces Difficult Meeting with Monti

German Chancellor Angela Merkel travels to Rome Wednesday to meet Prime Minister Mario Monti, just days after the Italian leader got the upper hand over her at the EU summit in Brussels. It won’t be an easy trip, given Italy’s new self-confidence and its political alliance with Paris and Madrid. The chancellor will have to define a new role for herself in European politics.
http://www.spiegel.de/international/europe/merkel-in-rome-chancellor-faces-tough-meeting-with-mario-monti-a-842535.html

Michael Taft: Opening Up a New Debate over Social Insurance

Long-time readers of this site will know that I’ve been hammering away for some time at our low level of social insurance. Minister for Social Protect, Joan Burton, TD, has also started making noises on this theme. Good. The problem with the structure of Irish taxation is not that it is necessarily low-taxed (it isn’t). Rather, it is low-insured. We pay in little, we get little and we end up with a big hole in our public finances and considerable levels of social and economic uncertainty.

[…] Here’s a new slogan for progressives: a low-taxed, high-insured economy. That would really subvert the old stereotypes.

http://www.irishleftreview.org/2012/07/03/opening-debate-social-insurance/

@ DO’D: I think Michael T and his buddies had better sharpen their pencils and start doing some sums. Incomes are down (and falling). So how will the government raise more revenue? We are overspending and borrowing to fill the gap. That’s insane.

Ten years ago one would have predicted that if you continue with this sort of deficit creation then in the long-run your goosed. Well the ‘long-run’ has come; and we ARE goosed. Suprise! Suprise!

What nature of event will bring the Rectal Right and Looney Left back down to earth? Will anything? Its truely sad.

Eureka,
Savage for the previously employed who are now unemployed. If you were on the state payroll either as an employee, welfare recipient or especially a retiree you have been protected to a large degree.
If you were in the private sector you have been screwed to pay for the public sector aristocracy and their yeomen.

@ Tullmacadoo

If you were in the private sector you have been screwed to pay for the public sector aristocracy and their yeomen.

Presumably said “screwing” came in the form of higher taxes, then.

Wait, no such thing occurred?

@ Alchemist

Is it inability or unwillingness at government level to think through a workfare program?

I presume you mean state-coerced free/cheap labour for capitalism that has worked out so well with the internship scheme (not). Peculiar how ‘liberty’ seems to work.

I can imagine the caterwauling that would ensue here if a public works programme to construct some actual infrastructure of worth (of the type that has been used in the past) were to be pursued instead.

@ EWI
No “screwed” came in the form of the 4 year Croke Park betrayal, NAMA and the blanket guarantee and more specifically, the relentless cutting of capital programs, the culling of all temporary contracts for workers, the relentless elimination of any leekage of exchequer financing to the private sector. Save for almost unlimited funds made available to the myriad of private professionals doubling up in the HSE or those who were deigned necessary to measure, quantify, liquidate and legally validate the various gravy trains, and self-rescue vehicles.

Ask those coming out of universities with first honors what they think of government policies? The first thing they have to do is try and figure out which country they could possibly emigrate to. It took them all of about 10 seconds to work out that they are the latest victims of parish pump politics and the disgusting nexus of social partnership with crony politicians. This, while the fat cats who were/are in bed with Michael Taft, Jack O’Connor and David Begg are guaranteed their jobs, increments, salaries and pensions not to mention, a mind blowing 800 staff allowances. All this, even as the private sector has its pensions funds expropriated by the state and are put on the hook for one bailout after another which we all know is designed to keep the current failed system in a state of stasis or sickly ‘equilibrium’. This as the current band of central players (Noonan, Kenny, Rabbitte, Howlin, Gilmore) edge ever closer to retirement.

@ Mark + 1

I believe that the system would work, much more efficiently, if some of the human debris that is clogging its veins and arteries were surgically removed. Croke Park is designed to circumvent keyhole surgery and guarantee a full on heart attack. Instead, it substitutes unemployment, emigration and private sector business euthanasia as a methodology to achieve “the necessary internal devaluation”. What vision has Kenny and Gilmore enunciated for Ireland? None, other than more Croke Park, more Bailouts, higher unemployment and more surrender of sovereignty. Sacrifice children to the gods of finance if we must, but whatever happens, make sure some other sucker hands over the hard cash even if that sucker has to be German. Sure as our rural TD’s and ministers like Phil Hogan keep telling us “are’nt all us Irish in this together”?

@ The Alchemist

Frank Daly earned €151,000 in fees in 2010 plus his public sector pension.

McDonagh earned €450,000 in 2010 plus a car and health insurance. Handy earning for a cost and management accountant who first worked at the ESB!

The staff are employed by NTMA and the pension funding was about 30%

For bond ‘experts,’ it’s surprising that 78% of the pension fund was invested in equities.

@ Robert Browne

+1

Eamonn Gilmore’s big idea when in Opposition was a fourth official review of the Constitution since 1995.

I did comment in 2010:

Eamonn Gilmore’s steering clear of the specifics of public service reform prevents him from addressing other areas such as the cartel-like fees in professional services. The Government is their biggest customer and protects them from transparency and serious competition. State toxic property loans agency, NAMA, has become the latest rainmaker, pencilling in €2.5bn in fees in its budget and the Victorian system of secrecy has been seamlessly stewed into the structure. So in a period of austerity, why are some of Dublin’s law firms among the biggest earners in Europe? The same question can be asked about the super-fees in medicine, paid via the insurance system and much more.

@ Tull

“If you were in the private sector you have been screwed to pay for the public sector aristocracy and their yeomen.”

If John Paulson had been in charge of the private sector pension funds and returns over the last 10 years had averaged 15% would the comment still apply?

Seafoid,
Paulson runs a leveraged hedge fund not a long only pension fund. Big difference. A lot of his return came from a big short on sub-prime. How could an Irish PF which is not supposed to short put on such a trade. Moreover, his recent performance has not been stellar largely due to leveraged long positions on US financials.
So comparing Paulson to Irish managed funds is comparing a jet to a family saloon.

As to your question. Read Robt. Browne’s post. It is much more eloquent and angry than anything I could ever write. Correct too.

why no thread on Martin Wolfs article in the times…raises some very important issues that I was fully cognisant of in relation to limit or no limit texas hold ’em but hadn’t accounted for in the bond markets….perhaps it is time to get into bonds…actually i wasn’t that good at poker so maybe not.

http://www.irishtimes.com/newspaper/finance/2012/0704/1224319341279.html

with more detail on the poker from Professsor De Grauwe

http://voxeu.org/article/why-eu-summit-decisions-may-destabilise-government-bond-markets

@V Barrett
Its a clear set up.
Credit banks should not get one drop of Fiat.
Goverments should issue it directly & equally to its citizens.
This would reduce the banking leverage withen the system and their power over us.
The ESM is a further removal of politics from money and a even bigger subversion of Goverments fiat money power by the Venetian banks.

Debt is a metaphysical concept.
Debt is not Wealth and Money does not have to be debt..

Tull

Nobody was moaning about the PS when the private pension funds were taking contribution holidays.

If the neoliberal model hadn’t gone t#ts up most pension funds would be in surplus. All of those consensus investment managers had a role in the mess and blaming it all on the PS give an incomplete picture.

Irish blue chips were never that blue, really. Do you remember GPA ?

When Paulson makes on his bets who pays up? Is it mostly pension funds or investors way down the food chain ?

Tull

There is of course a difference between Paulson and the Budget Travel pension scheme but in an asymmetric investment world where a tiny portion of players with access to the best information take an inordinate amount of profit out of the market, it stands to reason that there is less available to go around for the mostly buy and hold crowd representing the little people. I would love to see the data on last year’s market panics and how the pension funds liquidated positions- do you think they tend to hold their nerve or do they just lose it when the VIX goes over 30?

@seafoid

First, it is pension fund trustees, usually under the influence of actuaries who are likely to panic out of a market, not fund managers.

Second, the way you are typing about this suggests to me you might not appreciate how difficult it is to persuade trustees to go for an investment brief that is away from the pack. The answer is, very.

Third, Paulson is just a savvy punter. He made a shedload out of his super-subprime short, but he has since made an idiot of himself with non-existent Chinese trees and a non-existent housing and US financials boom.

@ Robert Browne

NAMA, the blanket guarantee, the culling of capital programs etc. are nothing to do with the public sector. As for this:

the disgusting nexus of social partnership with crony politicians. This, while the fat cats who were/are in bed with Michael Taft, Jack O’Connor and David Begg are guaranteed their jobs, increments, salaries and pensions not to mention, a mind blowing 800 staff allowances.

…it’s beneath contempt. So clerical workers and bin men are to blame, while the likes of Seanie etc. are the real victims, eh?

The term austerity is thrown around a bit too loosely.

Commenting from America, perhaps the Irish cannot see this, Ireland has been under an austerity regime since its independence. A military austerity regime. No deep water navy, no jet fighters, no anti ballistic missile defense, but more to the point mass unemployment caused by the lack of a an at least 30,000 (Wikipedia reports a feeble 10,000, Georgia justifies 37,000 why not Ireland) strong military, plus add on jobs from Ireland’s participation in the F-35 joint strike fighter boondoggle. So why no complaints about Ireland’s near century of military austerity? Isn’t it cruel to put all those brave and/or heroic Irish out of work while depriving Ireland of a proper national defense, not to mention all good works all over the world an Irish military could perform?

@ George

I’m going to assume for a moment that you’re for real, and not just indulging in clever satire.

The “deep water navy”, “jet fighters” and “anti ballistic missile defense” are eye-wateringly expensive items, the vast majority of which expenditure (both purchase and maintenance) would go straight out of the country to foreign arms dealers.

10,000 is more than adequate to secure a small, relatively peaceful island in the middle of the Atlantic, whose near neighbour has become house-trained in the past century. And we have “good works” covered, thank you very much. It doesn’t involve invasions or occupations under fig-leaf pretences.

@ Grumpy

It doesn’t have to be Paulson. Pick anyone who has access to better quality information. It could be whoever has the right political access and the money to do the research.

Say the actuaries panic. Why ? It comes back to information, doesn’t it? It looks like a food chain.

And where does the consensus come from?

You would have to feel sorry for the Trustees. Presumably not too different from Morgan Kelly’s slighty dim former rugby players. Way out of their league now?

@seafoid

“You would have to feel sorry for the Trustees. Presumably not too different from Morgan Kelly’s slighty dim former rugby players. Way out of their league now?”

Would you beleive me if I told you it was possible to simultaneously have two sets of trustees, one of which didn’t realise funds meant for short term expenditure should go on deposit rather than into the main fund, and another that included a guy whose middle name was ‘Money’ (literally), a bloke who formerly ran a proper private bank, and the chief economist of an IB?

@EWI

Your arguments in favor of continuing the century of Irish military austerity “expenditure … would go straight out of the country to foreign arms dealers” and “10,000 is more than adequate to secure a small” could be applied to any spending program. The money would go straight to China (consumer goods) and various petro states, and anyway Ireland does not need any new monuments, high speed railroads, international airports ect.

BTW, all the money need not go to foreign arms dealers (or local politicians), for example F-35 (actually and aircraft) and German U-Boats can have substantial local value added. And of course the same is true of any future Irish high speed railroad. So what’s the difference really? I personally, from my American perspective, think an Irish U-Boat painted dark green with a bird of prey carrying a harp painted on the sail (or is it fin?) (representing the ideals of the Irish submarine fleet) would look “bad ass”.

As to the accusation of satire, in judging military affairs distinguishing comedy from tragedy is often impossible.

Your arguments in favor of continuing the century of Irish military austerity “expenditure … would go straight out of the country to foreign arms dealers” and “10,000 is more than adequate to secure a small” could be applied to any spending program. The money would go straight to China (consumer goods) and various petro states, and anyway Ireland does not need any new monuments, high speed railroads, international airports ect.

Monuments and international airports are futile, I agree – but schools and civil engineering works such as railway improvements are not, and would hit a number of desirable policy targets at once. Wasting money on expensive foreign military toys is flushing it down the toilet in a way that delivers *no benefit whatsoever*. Even a public works scheme erecting statues of former FF ministers the length and breadth of the country would deliver local employment.

BTW, all the money need not go to foreign arms dealers (or local politicians), for example F-35 (actually and aircraft) and German U-Boats can have substantial local value added.

I think you need to realize that even the paint jobs on these things will be applied by foreign contractors (for a variety of commercial, technical and military secrecy reasons).

And of course the same is true of any future Irish high speed railroad. So what’s the difference really?

The railroad clearly will have substantial local stimulus effects during building – it’s a civil engineering works, after all, one of the things we can do well. I’ll leave arguing the benefits of high-speed rail to the Dork, who seems to know a lot about it.

The F35 is good for zipping around the sky at €1million+ cost per flying hour, making future Ryanair pilots feel sexy for the few years that they’re in the Air Corps. All fuel, parts and maintenance will be sourced abroad (and before you think to argue with me on this, I happen to know a lot on the subject, so be warned).

@EWI

“Monuments and international airports are futile, I agree – but schools and civil engineering works such as railway improvements are not”

Do schools do damage? The buildings require the destruction of pristine land. The highly paid staffs retire young with comparatively lavish pensions putting a burden on those not so privileged, and their constant vacations accomplish nothing worthwhile for all the carbon they inject into the atmosphere. And generation after generation of Irish will be stultified by the archaic nature of government educational systems. But I am ranting, a more salient point worthy of if being on Irisheconomy.ie is that schools are obsolete. With the internet and private sector upstarts like the Japanese service Kumon school is no longer needed. These services are cheap enough that the poor can have equal access to them, eliminating the most important ‘progressive’ (in US politics) argument for your schools stimulus program. With declining birth rates in the west Communist Manifesto point 10, free schools and an end to child labor, is no longer needed to reduce the ‘army of the unemployed’ that diminish proletarian wage rates. So actually schools in Ireland are more of a nuisance than my proposed U-Boat scheme. And besides a U-Boat, assuming Ireland is never tempted to use if for its intended purpose, will cause very little environmental damage, take up little space, be mostly crewed by young people who will leave before being pensioned, impart important skills like operating hydrogen fuel cells, and when it is obsolete will last for centuries as a kind of sculpture in the Irish naval museum. And did I mention how ‘bad ass’ a U-Boat would be in comparison to a school?

High speed railroads and civil engineering projects are as bad as schools. Here in the US we are ripping out all those dams built to keep the army of the unemployed occupied during the great depression. Civil engineering does double duty in destroying the environment, once during their costly construction, and then again by bringing ravaging tourists to the once pristine countryside.

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