Is (teaching) Economics doing more harm than good? Post author By Seamus Coffey Post date October 29, 2014 Some interesting thoughts (and evidence) from Brian Lucey here. Categories In Teaching 60 Comments on Is (teaching) Economics doing more harm than good? ← Unicef’s Report Card → Reminder on Blog Etiquette 60 replies on “Is (teaching) Economics doing more harm than good?” Have you ever met a freemarket Economist who, after having done some data based research became a social democrat? Or could You imagine an economist who currently works for the a trade union getting a job in a bank? Not without a complete Damascan style rethinking of their previous work (massive pay rises can do that) The aspect i think most interesting is the propensity for psychopaths and sociopaths to be attracted to financial trading. Isnt it likely the same is true of economics? If you are contemplating the possibility, rest assured you probably are not one. Critical thinking isn’t their strong point. Some interesting thoughts from the best critical thinker on the planet. http://www.chomsky.info/interviews/20140215_2.htm Yes. Seamus, you have some weird comment filtering, or gremlin stuff going on. Posts vanishing. Is the said person actually banned from this site? He said he was on twitter. Extract: “It is a well-known psychological phenomenon that people in groups tend to develop more extreme views – the phenomena of group polarisation may mean that people who spend time with economists may well adopt more extreme versions of the views of economists” Few people study economics long enough and with enough genuine interest to really appreciate the inadequacies of the teaching, beliefs and often, the ‘research’. Most, get some knowledge and a sense of confidence in their slightly clearer understanding than non-economics students, and subconsciously extrapolate that. Their teachers may be aware of many subtleties, shortcomings and contradictory viewpoints and be, as a result, less inclined to reach extreme conclusions. PPE or P&E as a foundation for a career in politics might be an example. Another: “Economics is often stated to have physics envy, a hankering after the cleanliness and order of (classical, Newtonian) physics. All too often this desire for order manifests itself as meaningless statistical precision. As I constantly tell my students, it is much better to be approximately right than precisely wrong. “ I wasn’t aware physics envy was limited to the classical or Newtonian. The respect for their conclusions physicists achieve does not arise because they are not working with statistics or approximations, but rather that where nothing other than a statistical description is available they are precise with regard to the limitations of what can be inferred from a statistical or probabilistic representation. Power and achievement. Achievement is much harder under low or no growth when the memes are neutered. Genius is leverage in a rising market but not in a deflating one. I don’t get the impression that economics has any time for the contingency of life especially between the breakdown of one economic paradigm and the emergence of another. Is it doing any good? I suppose more economic history and an emphasis on the importance of nuance would help. Economics is more coherent than the Sindo. Maybe some evangelisation in the PS wouldn’t go amiss.For stuff like evidenced based policy and policy assessment and improvement. Also more interaction with other professions. Seventeen comments in and nobody has yet said anything about the actual content of the material linked. Has it been made a non-article? @JtO, and @that guy BL Here is the inoffensive version: Extract: “It is a well-known psychological phenomenon that people in groups tend to develop more extreme views – the phenomena of group polarisation may mean that people who spend time with economists may well adopt more extreme versions of the views of economists” Few people study economics long enough and with enough genuine interest to really appreciate the inadequacies of the teaching, beliefs and often, the ‘research’. Most, get some knowledge and a sense of confidence in their slightly clearer understanding than non-economics students, and subconsciously extrapolate that. Their teachers may be aware of many subtleties, shortcomings and contradictory viewpoints and be, as a result, less inclined to reach extreme conclusions. PPE or P&E as a foundation for a career in politics might be an example. Another: “Economics is often stated to have physics envy, a hankering after the cleanliness and order of (classical, Newtonian) physics. All too often this desire for order manifests itself as meaningless statistical precision. As I constantly tell my students, it is much better to be approximately right than precisely wrong. ” I wasn’t aware physics envy was limited to the classical or Newtonian. The respect for their conclusions physicists achieve does not arise because they are not working with statistics or approximations, but rather that where nothing other than a statistical description is available they are precise with regard to the limitations of what can be inferred from a statistical or probabilistic representation. [banned word beginning with Q redacted] mechanics would be a classic example of a spectacularly useful and reliable discipline entirely predicated on the acknowledgement that precision does not exist and the characteristics of the approximations are the only knowable or useful information. Too often, economists look like a bunch of 19th century physicists engaged, often on behalf of sponsors who have by way of interest a financial wager on the outcome, in a furious row about the precise location of a particle at a precise point in time. Hi Bock, are you for real? Did you miss the direct quotations from said article and their discussion – not to mention gargantuan effort to get them onto this thread?! @Nairb W. Yecul Playing the ball, as distinct from the man, it is novel to see a finance academic taking some critical steps on the life-as-lived of the social scientific lifeworld. @eamonn moran Chomsky is up there, but imho, simply ‘with’ the best! @unfeasiblycharming. Lucky you pointed that out. From the title of the thread! Good to whom? And harm to whom? Methinks that the profession of economics in general, with which the bulk of the population have perforce become acquainted, would benefit from taking itself a little less seriously. Economists should in theory understand what is going on and many would be in a decent position to comment insightfully but it’s hard I suppose with careers and stuff. And the history of the human group is in many ways a struggle against the veneration of crap, as Neil Postman said. Does economics education make the financial system safer? Not yet. Gentlemen, I have identified that which ails economists the world over and a lot of commentators/journalists on this island: It is called the Dunning-Kruger effect. http://www.psmag.com/navigation/health-and-behavior/confident-idiots-92793/ Experts in other fields, say medicine, often hold views that differ from those of wider society on certain subjects (Ebola prevention, say). While they also might be accused of being elitist weirdos, they can defend themselves on the grounds that their discipline is descriptive and objective. If you accept that economics does not have these properties, then the only way for economists to avoid similar accusations will be to conform scrupulously to the views of the great mass of non-experts. Unfortunately however, the view of the non-experts is: “There is something wrong with a thing called The Economy, and it is the job of Economists to fix it!” @ Skeptic “Experts in other fields, say medicine, often hold views that differ from those of wider society on certain subjects ” I think a lot of doctors and medical pros just follow the herd. I don’t believe economists are sui generis. It takes courage to stand out from the masses and say what you really believe. Look at all the crap Kelly still gets because of Draghi’s put. Will it lead the EZ to the sunny uplands of price stability ? The jury is still out. As Aldous Huxley said “Most human beings have an almost infinite capacity for taking things for granted “ Just focusing on students majoring in economics, it’s hard to believe that they would be more greedy than medical students where many can at least realistically expect to make a lot more money. MBA students looking to get jobs in finance and consultancy would of course be aware of the potential of high earning at least for some. Janet Yellan suggested today that a white-male dominated profession does impact outcomes. Low turnover of staff must also be a problem in a sector that is relatively sheltered and not subject to lots of change. Janet Yellan, Fed chief, said in a speech today: When economists delve into why there isn’t more diversity among them, they end up asking about what is being taught in college, how economists are being trained in graduate school, and other questions that bear on the health and the future of the economics profession in general. These are not idle questions. All of you know that there has been a fair amount of public debate in recent years about the health of the economics profession, prompted in part by the failure of many economists to comprehend the dire threats and foresee the damage of the financial crisis. When the public asks whether economists did all they could have to understand those threats, in part they are asking whether our profession did enough over the years to test ideas and assumptions that turned out in some cases to have been mistaken or misplaced. And part of that question is this one: Did the economics profession recruit and promote the individuals best able to bring the energy, the fresh insights, and the renewal that every field and every body of knowledge needs to remain healthy? The Fed has more than 300 Ph.D. economists in Washington DC and more than 400 serving at the Fed’s 12 Reserve Banks. What’s my incentive for answering this question? @MH / BL “MBA students looking to get jobs in finance and consultancy would of course be aware of the potential of high earning at least for some.” I think that is fair point. But it is equally true that the school of thought being promoted will influence both the student, and in particular the students ability to enhance his or her career. I can still recall being taught, back in the distant 1970s, from a compendium of essays. [Perhasp by Gunnar Myrdal?]. A standard book of essays was a set text for the class. Two essays were set out following each other in the textbook. The first of these was a chapter from Galbraith’s The Affluent Society’, analysing current economic problems. This was immediately followed by an essay from another economist, Friedman I think, proposing solutions to the problems analysed. Of course Galbraiths solutions (presented in the following chapter of ‘The Affluent Society’) were almost 180 degrees different from those that were presented in the second essay in the textbook. [The prof at that time did not react too kindly to being rumbled on his selection of material]. I have doubts that an unbiased teaching of the subject of economics, would influence more people than were already disposed to be influenced in a certain direction, but BL has presented some interesting evidence in that regard! Is it boiling down to being practical, but a slave of a defunct economist, or impractical, and a slave of a not-yet-defunct one? As a purely technical subject, economics probably has some value. The greater the profiency at understanding and explaining complex economic statistics, both current and historical, the greater the value. The author of the thread is the prime example of this in Ireland. The ideal economist should be able to analyse statistics objectively, and not be influenced by political bias or religious bigotry. Unfortunately, there are very very few economists in Ireland today that meet this requirement. There are a few, and thankfully a couple that come to mind are probably the most frequent authors of threads on this site. Seamus Coffey and Philip Lane. The N. Ireland economist, John Simpson, (who taught me for a year in 1967 and unbelievably is still going strong), also falls into this category. However, there is a whole coterie of (usually younger) economists (using the word loosely) in Ireland now, whose limited intelligence and limited ability to understand and explain complex economic statistics is overwhelmed by their anti-nationalist and anti-Catholic bigotry (very similar to what was widespread in N. Ireland in the 1960s). This group of economists have rewritten and falsified Ireland’s economic history of the past half century, especially since 1986, because they are unable to come to terms with the fact that a mostly rural-based moderately-nationalist moderately-Catholic political party presided over one of the world’s greatest-ever economic booms. They seek to discredit it by now invariably calling a ‘bubble’. Their wild, hysterical and now totally-discredited predictions of economic armageddon for Ireland derive from the same bigotry, and not from any proficiency at understanding economic statistics. They spent 2009-2012 predicting total economic ruin for Ireland, not because there were any historical or current statistics that suggested it was likely, but because their hatred and loathing of traditional Ireland reached such proportions that it overwhelmed their ability to analyse statistics intelligently. Much the same as I predict a 7-0 defeat for Arsenal every weekend. Another group of economists in Ireland, although not in all cases sharing the bigotries referred to above, have so convinced themselves that Ireland being in the euro is a disaster, with the inevitable consequence of no growth until the euro collapses, that they are simply unable to take in the fact that the Irish economy is currently the fastest-growing in Europe and quite likely to stay that way for a few years. A swift appeal to the mods., to consider the release of BL, PH, Dork & others. Perhaps update the ‘about’ page to be a little clearer about what gets people kicked off – ad hom attacks, persistent irrelevancy and character slurs, etc. Perhaps a more Rugby style sin binning rather than the red card. But I do appreciate people are running this on a goodwill basis so it needs to be kept simple. http://www.irisheconomy.ie/index.php/about/ @ JTO “that they are simply unable to take in the fact that the Irish economy is currently the fastest-growing in Europe and quite likely to stay that way for a few years.” Why is it growing? Why will this be the case for a few years? Tull thinks it’s on the back of the US/UK doing reasonably well. I think that’s the most realistic explanation. Is the US recovery sustainable? I dunno. One answer to the question posed might be for universities to accept that there is no such discrete subject as “economics”; only one that, I gather, used to be called “political economy”. On the point raised by JTO above, by way of example, it is a matter of fact that the degree of liberalisation and flexibility now built into the “management” of the Irish economy is such that could only be dreamed of in most EU countries, with the possible exception of the UK. This is undoubtedly a large measure of the explanation for the recovery. Germany, currently impacted seriously by strikes and contemplating new legislation, is no exception. http://www.faz.net/aktuell/wirtschaft/neues-gesetz-gegen-ausufernde-streiks-regierung-will-piloten-und-lokfuehrer-zaehmen-13232756.html This is an outcome of the links between politics and economics that common sense suggests cannot be disassociated. I should make clear that I am not talking about economists having or not having a political viewpoint (or a blogger under a pseudonym choosing to categorise them according to his/her own view of what constitutes the right politics) but of integrating the politics that apply – whatever they happen to be – into the analysis of particular economic issues. A big challenge! A suitable current case! http://www.independent.ie/irish-news/politics/phil-hogan-pay-for-water-or-pay-more-income-tax-30707749.html @DOCM “On completing your political economics degree, you will have many opportunities to work as a lobbyist/promoter, e.g. for the trade union movement or the mortage brokerage industry. Our course will equip with you with a broad range of left and right-wing economic factoids and rhetorical devices, allowing you to prosper no matter your choice of employer. We also teach modern communications techniques, such as blogging, tweeting, and writing anonymous ad-hominem on-line troll comments. Don’t miss our optional add-on module, ‘How to make statistics say what you want them to say'”. @ skeptic01 FYI an article picked at random from a wide selection available on the web. You might even want to tweet it! http://www.newyorker.com/news/john-cassidy/rebellious-economics-students-have-a-point @ DOCM They may have a point but they have no leverage The name of the game is power. @Seafoid “Why is it growing? Why will this be the case for a few years? Tull thinks it’s on the back of the US/UK doing reasonably well. I think that’s the most realistic explanation. Is the US recovery sustainable? I dunno.” I chose my words carefully. I said ‘quite likely’. I didn’t say ‘certain’ or even ‘very likely’. Nothing is ever ‘certain’ and rarely ‘very likely’, as Dublin discovered v Donegal a few months ago. I’d say its ‘quite likely’ based on: (1) Big improvement in competitiveness in recent years – Ireland has had by far the lowest inflation rate in Europe since 2007. (2) Position in economic cycle – large balance-of-payments surplus and still relatively high unemployment (although falling rapidly) – so, little external constraint on demand in economy and little danger of loss of competitiveness from inflation in next few years. (3) Position in new house-construction and other construction cycle. New house construction in 2014 some 90 per cent down on peak and 75 per cent down on long-term average. Something similar for other construction. Construction industry output can only go one direction in next few years. (4) Lifting of milk quotas in 2015. (5) Excellent outlook for tourism. Low inflation has restored price competitiveness of tourist industry, numbers are soaring and Ireland is getting rave reviews from organisations like Lonely Planet. (6) Flood of FDI into Ireland currently. And FDI redundancies currently at record low. Probably due to tax rates, good education system (Ireland scores high on PISA tests), greater availability of younger people than elsewhere (due to Ireland not having had industrialised abortion for past half-century) and general work ethic. (7) Oil prices currently low and forecast to stay that way for a few years. As Ireland produces no oil, that’s a big plus. As I said, ‘quite likely’. Its not ‘certain’ or even ‘very likely’. Lots of things could go wrong. There could be any one of a number of global disasters that could reduce growth in the next few years or even cause a recession. There always is. Among them, war in Middle-East or Russia/Ukraine war that disrupts oil or gas supplies, ebola or something similar that disrupts international travel, global stock market crash, plus others. I am aware of these risks. Unlike some, I don’t go round in a constant sate of fear (or hope?) that they are about to occur. A fortnight ago, the ‘inevitable stock market crash’ was all the rage among the cognoscenti. Last night the Dow Jones finished at a record high. Reading through a certain TCD economist’s entertaining piece, and the comments here, I can’t escape the feeling that studies which suggest that economics students are somehow a greedier bunch than science or humanities undergraduates, or any other identifiable group within society , are specious. The great crash highlighted the flaws inherent in some long-established economic models as reliable predictors of, well, anything really. Surely then, it’s up to economics teachers at third level to make their students aware of the limitations of existing theories and models? Some among the broader community of economists may want to beat themselves up for a perceived personal, or collective, failure to see what was coming down the tracks. Or, as in cases like Ireland’s property bubble, for temporarily getting caught up in a misplaced general euphoria of the time. They shouldn’t bother. In the increasingly complex financial and political environments of the 21st century, were the traditional tools of their trade up to the job? Thursday night’s BBC Newsnight hosted a short debate on ‘evidence-based policy’. As always, it emerged that there is a tension between the politics of what is ‘acceptable’, and thereby politically feasible, and the ‘expert evidence’ that in an ideal world should drive policy decisions. The ideal world doesn’t exist. Moreover, there is always some uncertainty surrounding expert advice, whether based on scientific evidence or rigorous economic analysis. At some point within the policy-making process, the ‘evidence’ becomes politicized. It is then used, often in good faith, to support a political end, rather than as a guide to the means by which an end may or may not be achievable, or even desirable. The question is how to discern the point at which evidence politicization becomes active within the policy-making process and what effect that may have on ‘good’ or ‘bad’ policy choices and outcomes. @DOCM re: Phil Hogan And water What exactly are we paying for? “Professor John FitzGerald, senior researcher at the Economic and Social Research Institute (ESRI), said the extra wages and other costs for 2,000 extra staff would amount to around €150m a year – or up to €2bn until the arrangement expires in 2025.” http://www.independent.ie/irish-news/irish-waters-2000-extra-staff-to-cost-householders-2bn-29952271.html Plus pensions, bonus payments, consultants, car allowances etc, double taxation. And this from John Fitzgerald; “”If the local authorities get to choose who goes, they may be tempted to pick people they want rid of. Irish Water will end up even more inefficient than if it could pick people itself.”” Frankly re Uisce Eireann. A collection of insiders could not have done better for themselves, and a collection of idiots could not have done worse for everybody else. I intend to protest today. Mine is a protest against incompetence and cronyism and particularly against the feather-bedded guango that the general population are expected to pay for and endorse. [Eamonn Ryan’s call for a constitutional amendment preventing privatization has real merit, in my view] Of course the country needs the money. That is why in the finance bill that MOF gave people who have ARFs (Approved Retirement Funds) an income tax cut of 1%. That amounts to €10,000 for people with ARFs of 1m or more, and there are several thousand of those. Those people have been well compensated for the cost of filling their bath-tubs.That and all those tax giveaways to farmers. There is no shortage of money for Friends of the Party. PS the tax giveaway to ARF holders, was not announced on budget day, it was given subsequently in the Finance Bill. [ARF, ARF !!] @ JTO your 2, 4,5 and 6 are dependent on outside factors . 3 is dependent on momentum and is a derivative of 2,4,5 and 6. So it may work out well but it is highly dependent on how things go in the main export markets. I wouldn’t pay much attention to the level of the Dow Jones yesterday. The US is also vulnerable to a shock from the blindside. Stock markets are not efficient. As John Authers noted a while ago “The physics of markets and economics can be strange. Trends continue in motion long after they should have halted. It can take years for ineffable logic to work itself out in market prices. External shocks take time before they are reflected in inevitable damage to the overall economy.” So the party might continue for a while more. But the longer term does not look good. One of the dangers of excessive monetary stimulation is of course that it’s no longer effective in getting the economy going Here’s an example from another field http://www.theguardian.com/culture/2014/nov/01/ethical-p#rn-fair-trade-s#x Danny Wylde recently had to give up a career as a performer in p#rn#graphic films after getting priapism as a result of erectile drugs for the third time in eight years. “I received word from the doctor in the emergency room that the more often this happens, the more likelihood of you losing the ability to get an erection, period.” 3 QEs in 6 years…. A commentary – which is one for the archive – by John Downing of the Indo on the peculiar relationship between the Irish and water. http://www.independent.ie/irish-news/water/the-people-have-been-here-before-so-have-our-leaders-30709257.html In the context of this thread, the question must be; how can an entire population be left in such a state of antediluvian ignorance on the subject of the need and the means to provide treated water? There is no doubt that, but for the fact that the troika is still very much here, the current rainbow coalition – or any other government – would bottle it once again. Cliff Taylor explains why! http://www.irishtimes.com/news/ireland/irish-news/government-s-wiggle-room-on-water-charges-limited-1.1984023 @ JR There is clearly legitimate outrage at the ineptitude with which the government has gone about the matter. But the roots of public resistance to paying for water lie deep and, on the basis of the twaddle that one is compelled to listen to every day, in ignorance. I would make an exception for the political carpetbaggers involved who know precisely what they are about. @Seafoid I agree growth in Ireland largely dependent on outside factors. Always has been. There is not much difference between your ‘may work out’ and my ‘quite likely’. Disasters sometimes occur, but more often than not they don’t. It looks as though what all these water protesters are actually protesting against is ‘overmanning in the public sector’. It is employing 4,000 when 2,000 could do the job just as well. It is good to protest against this. If I was south of the border, I might join the protest, but my banner would read ‘Down with Overmanning in the Public Sector’. I doubt, however, if many of the protesters know this and the braindead Irish media’s obsession with this has more to do with their psychological need for a terminal crisis, now that they’ve been deprived of the economic collapse they were banking (sic) on. One particularly crazy columnist (I am ashamed to admit from north of the border) predicted this week that the water pseudo-crisis would bring down the government before Christmas. The idea that, with the economy growing at 5-6 per cent, and quite likely to continue at a good rate until April 2016 at least, the government will be forced into an early election over water is totally mad. The primary objective should be to get high-quality water supply at lowest possible cost. Having water supply controlled by 34 separate local councils is bonkers. A few years ago Coca Cola moved a bottling plant from Kildare to Antrim because they said the water quality was better up there. N. Ireland already has a single water authority. It is also good in principle to pay for water using water meters rather than general taxation. Water supply needs to be run as a business. But, as a corollary, this requires optimum business efficiency. Water quality could be maintained and costs minimised by the following: (1) A single water authority for All-Ireland. On a small island like this the idea of two separate water authorities for two separate artificial entities is also bonkers. (2) Move the HQ of this single All-Ireland authority away from Dublin (or Belfast) to a medium-size town in rural Ireland (Dundalk or Newry perhaps), where office and housing costs are much lower. (3) Reduce numbers employed to optimum efficiency level as fast as possible. (4) Keep open possibility of privatising said water authority, but waiting for 5 years or so to see how state=owned water-authority is performing. The Greens’ idea of wasting a fortune in a constitutional referendum to ensure water authority is always state-owned is daft even by their standards. DOCM just doesn’t get it. The protests about water are about yet another regressive taxation scheme (one in which the poor pay as much as, if not more than, the rich) being put in place by our EU masters, the same crowd for whom DOCM speaks and the same ones that forced Ireland to make the bondholders in Anglo (and others) whole and that bounced us into a bailout. In other words: the crowd who ALWAYS represent the interests of the wealthy over and against those who are not. Well, guess what? The people have had enough and not because they are ignorant but because they don’t accept the premises (what Cliff Taylor nebulously refers to as “the rules”). @ Ernie I did not say that the Irish people – or rather those in the 26 counties – were ignorant. I said that their attitude to the supply of treated water was rooted in an ignorance for which they are not collectively responsible. Hence my question! In fact, I have great respect for their collective wisdom which will see a system of water charges finally introduced with appropriate provision for the individual capacity to pay. In short, the country will catch up with normal practice elsewhere in Europe as it has done in many other areas and has, indeed, gone to the top of the class. (An example is the success in the area of recycling; second place, it seems!). In case you missed it! “In the context of this thread, the question must be; how can an entire population be left in such a state of antediluvian ignorance on the subject of the need and the means to provide treated water?” Ernie, and others… I’m interested in your opinion on something Recently at a post-event gathering I met a NUI academic who previously had spent more than a decade (PhD & then staff) in one of the top universities in the world. The others present were visiting from very good British and European universities. The visitors were stunned when they heard from the NUI academic that the average number of contact hours per week in the NUI is four. The NUI academic did 11 or 12 per week, as did many others in the NUI, and for the average to be 4, we were told that many did less than 4, or close to 1 or zero. A British academic from one of their top universities said that he was currently doing 20 per week, which he said was high there, and that the average in Britain is 12 to 15. The NUI academic then said that you would expect these staff with all of this time to have many more publications, and in the top journals etc., but no, we were told that their publications were most often much less, and that the academics with more student contact hours most often had many more publications, and in better journals etc.. What is your view on this? Do you agree that it should be stopped? We were told that work-shy academics had the circular argument that “I’m not doing more than the union average”, and were often active in the union, and that they hided behind contracts. Can we have a full release of statistics of all of these hours worked by post-grads, post-docs and junior staff, and also see the detail on just how little some NUI staff are working via contact-hours with students, and how little they are publishing. And if necessary, we can have a referendum to get rid of them – doesn’t that trump any contract? My view on it is that every part of it is misinformed. Namely: It is false that Irish academics in the NUI teach 4 hours per week. It is false that British academics do 12 to 15. The place where, in my experience, 4 hours per week is common (but hardly the norm) is the US, particularly at the better universities where many do less. If you have some contrary evidence about any of this that doesn’t come from idle cocktail-party conversations, please present it. But it speaks volumes that this is the way you and a great many others get your information, which you then confidently put forth for others as if it were certain. Understand this: Ireland is not being ripped off by its academics, no matter how much you’d like to believe that it is. @ JR To complete the picture, see this press release by SIPTU. http://www.siptu.ie/media/pressreleases2014/mainnews/fullstory_18638_en.html Especially this gem. “We want the Government to defer the water charge due in the Spring of next year and to devise a method of offsetting the full cost of providing an adequate supply of treated water to meet normal domestic needs. At the same time it needs to find a way of providing the investment to fix the infrastructure and create a modern water supply system in public ownership.” That about sums up the general attitude. “Finding a way” is always someone else’s problem. @DOCM The unions, once again, as just as compromised as the government. But if want a few ideas re how to run Irish Water (UE), as distinct from how to create a SF led government, try the following. 1 Amend constitution to prevent privatisation of UE Water (source or network). 2. Start usage floor so that only water wasters are charged for first two years. [Water is a scarce resource, is it not] 3. The bill follows the meter. [The idea that tenants without meters are customers of UE is about the daftest notion that has ever been arrived at. But guess why? and to whose benefit?. Landlords of course. It is the most idiotic of ideas designed to protect landlords from having to install meters. The ESB should have tried it. We would have have the largest electricity mutual on earth.] 4. The meter follows the legal entity, person or company. 5. UE is not to become a sub-branch of the Department of Social Welfare. Allowances of all kinds reside in the DSF (I think that is now the new name for Social Welfare, but it changes pretty much every year or two. 6. Only staff necessary to the proper operation of UE are employed or contracted by UE. Surplus council staff are a matter for Councils, government and Jack O’Connor. 7. Consultants get removed forthwith and people appointed to positions of authority with UE, are requested to do the jobs they applied for and were appointed to. The jobs were not advertised as coming with a blank cheque book to seek advise for the highest paid consultants in the world 8. Remove Board and top management of UE (this should be No 1 on list, oops). I could mention two names here but won’t, but one of the names has only just been located. 9. Finally, when all this is done in about two years or so, the free household usage level could be gradually reduced, but never below a point that a very frugal household could not manage to survive on. If all the above leave leave both government and Troika plans short of funds, then perhaps the government would revisit the tax giveaways the lavishly extended to farmers, holders of ARFs and other favoured people. In the future we as a people need to pay for water and stop wasting it. But we as a people do not not need or should not hand over this critical resource to privateers and sharks, regardless of who is pushing their agenda, and there are many. 1 above should read: Source AND Network. @ JR A bit late for all that, I am afraid! Another comment, this time by Michael Clifford, for the archive. http://www.breakingnews.ie/ireland/no-one-to-blame-for-protests-but-government-itself-649489.html He is, however, wrong IMHO in his conclusion for two reasons (i) the government does not have the financial room to allow it to cave in and (ii) the politicians involved in the cave in on the last occasion, and still around, know that it did them no good whatsoever at the polls. Meanwhile, the FT is reporting that Der Spiegel is reporting that Merkel believes that Cameron might actually cause the UK to stumble out of the EU. This eventuality would reduce the row about paying for the treated water that one uses to its proper proportions. (That, and one of the most vociferous proponents of the right not to do so, claiming the mantle of Gandhi for actions of civil disobedience). http://www.ft.com/intl/cms/s/0/da16f51c-6287-11e4-aa14-00144feabdc0.html The government does have the financial room but they’d have to cancel the giveaways to the wealthy in the budget that they thought (wrongly) would buy them the election. Your arguments frequently amount to this: “If you accept as metaphysically inalterable the political arrangements that European technocrats favour, then it is strictly impossible to acquiesce to the democratic will of the people. Not that we’re in favour of doing that even when it is possible.” @ Ernie The people elected this government! Oh, did it? Do you think the Labour electorate voted for what Labour in government is giving them? Being elected does not give one carte blanche to ignore the will of the people and to fully embrace the dictates (about what’s “possible” and “impossible”) of the European technocrats. Quite the contrary, as both Fine Gael and Labour are about to find out. @ Ernie You have a very curious appreciation of the meaning of democracy. Were it widely shared, I would be worried. By all means, go ahead and influence insofar as you can any TD’s of your acquaintance to deprive the government of its majority in the current democratically elected Dáil. But until they decide to do so, and precipitate a general election, you are stuck with the present crowd. That is how it works! @DOCM and JR Siptu’s position is a a sham, and they know it. As per Eurostats rules as laid out by Cliff Taylor in the IT above. Either you can have people pay for over half the cost of Irish water directly keeping the costs off balance sheet, or you can give them an allowance of about 80-85% of average usage. You cant do both. The governments current position of giving a tax benifit of €100 to get around the need for the Irish people to pay 50% is also likely a sham and has to my knowledge yet to be tested. I would imagine Eurostat would tell them that its not acceptable to effectively fund a large part of the public’s 50% requirement. Remember we tried to get the Anglo losses kept off the national debt but Eurostat included them anyhow. But the big question we should be asking is why after the huge financial disaster of 2008 should we be trying to engage in such Enron style accounting tricks? I can understand why neo-liberal hawks in Europe would want to offer us this false manna from heaven. The arguments for nationalizing public utilities on the grounds of efficiency has been disproved by fact in the vast majority of previous instances throughout Europe, most starkly in the UK. So now politicians need another legitimate reason to continue with their privatization agenda. This off balance sheet bunkum is the best they could come up with. One simple question. 1. If Irish water went wallop tomorrow for some unforeseen reason would the Irish people and the state be on the hook for those losses? At the moment Irish water and all the other semi states and the banks have a free insurance policy from the Irish people. We need to reject the easy answers been spouted by a European agency that clearly has an agenda. If that means that the higher rate of tax has to be increased or preferably tax breaks for insiders need to be rescinded, then so be it. Central and northern European governments would not bite on this false manna. Its time we grew up. @ Eamonn Moran It is, indeed, time that we grew up and recognised, as all other developed countries have done, that water is a scarce resource and the provision of a treated version of is a utility like any other best charged for on the basis of usage – for evident reasons of conservation – with account being taken through normal social protection provisions of ability to pay. Everybody has an agenda! In this instance, that of the countries that have lent us money is to get it back but under criteria that have been agreed by the countries of the EU and applied impartially by its agencies; the one with the highest standing in this regard being, probably, Eurostat. A not unrelated development. http://www.irishtimes.com/business/economy/germany-urges-troika-name-and-shame-methods-1.1985360 “For Der Spiegel, which prints extracts of the report, the Schäuble-Gabriel paper marks Berlin’s belated return to the so-called community method – doing EU business via the commission – after crisis years of agreeing policy via EU capitals, the so-called intergovernmental method.” Merkel in a noted speech in Bruges some years ago (evidently tailored by her advisers to cultivate the image of the new Iron Lady as Margaret Thatcher had made a watershed speech at the same venue a decade earlier), came down strongly on the side of the intergovernmental method. Events i.e. the euro crisis, rather than Schaeuble have forced her back on to the well-trodden path which has given rise to the success and resilience of the EU in the first place. @DOCM: Why is it too late for the excellent suggestions that JR makes? Are you opposed to reform? Do you like wasting public funds? If not, why is it too late? @ Garo My reasons in more detail! 1. Ireland is not Switzerland where direct democracy is the norm (although one could be forgiven for thinking that it was; no less than 8 referendums being spoken of for next year!). Our feckless politicians are hopping on the bandwagon, nevertheless. 2.3.4. All issues on which I can only venture the view that had there been more time, something on the lines JR suggests might have been put in place. 5. UE is only assessing the technical basis for the allowances which are not decided by it. Giving details such as a PSI number is a matter of course elsewhere. Why not in Ireland? 6. Dream on! SIPTU is trying to be on both sides of the fence at the same time. A large measure of the future unjustified cost is due to feather-bedding for its members negotiated by it as a union. 7. The contracts were AFAIK for consultancy services not contracts for individuals. 8. It is far from clear where the dividing line in the matter of responsibility for the current mess lies; IMHO it lies mainly with the politicians who wished to introduce something which they knew was highly politically sensitive but wished to avoid the political consequences at all costs; they have failed spectacularly. 9. If only it were that simple! http://www.irishtimes.com/news/ireland/irish-news/why-enda-kenny-s-sums-on-irish-water-are-right-and-wrong-1.1986069 The bottom line could not be simpler. Ireland is out of step with every other country in Europe with regard to making people pay for their usage of treated water. Waffle about it being already paid for individually through taxation is just that; waffle. The argument would be laughed out of court were it applied to other utilities such as electricity and gas. Adding twaddle about water being a basic human right does not make the argument any more credible. There is no shortage of it in its untreated form. As Pat Rabbite shrewdly commented, the key issue is affordability. Treated water is expensive, especially the way this government has gone about it; and the electorate know it. So, what is the average household water bill south of the border expected to be? Being north of the border, I don’t know. But, I heard someone on the radio say 150 euros annually. Is this correct? If so, its extremely low. In England, Scotland and Wales, its £400 plus or 500 euros plus annually. I draw an analogy between the setting up of Irish Water and the setting up the National Roads Authority. The same opposition to that too at the time. When local councils were responsible for building roads south of the border, they were abysmal. They were an embarrassment to all N. ireland nationalists. N. Ireland roads were vastly superior. Unionists would taunt back then that, if you wanted to see what N. Ireland would look like in a united Ireland, you only had to look at the roads in Donegal and Monaghan, dirt-tracks most of them at the time. But, a big improvement since the NRA took over. They are now much better south of the border. You would think from the hysteria, that the government was putting the ebola virus in the water supply. The real problem is this. The loopy-left and their media supporters hoped for total economic collapse that would smooth their path to power. They didn’t get it. Its only dawned on them in the past few months that they aren’t getting it. The budget was the final nail in the coffin of their hopes of getting it. Hence, they need an issue, any issue, on which they can continue to rabble-rouse and claim a victory. They are throwing everything into the water issue, despite the fact that predicted water bills (see above) would appear to be much lower than elsewhere. Its their ’cause du jour’. Why, Trotsky McCann was even promoted to the Saturday edition of the Irish Times to lead the charge. The government should stand their ground, concentrate on accelerating the economic recovery, confident that this will blow over and be replaced by another loopy-left ’cause du jour’ in a few months. @JTO Not only is it extremely low its way below 50% of the actual cost. Irish people need to be paying over 50% or the government cant do the Enron accounting trick of moving it off balance sheet. Now the government are chancing their arm in assuming that giving tax rebates (so charge about 500 euro but return 350) will get them around this rule but that’s just another accountancy trick to to get around a eurostat rule (I don’t know whether Eurostat have given them the green light on that or maybe they are just hoping). This is the policy favoured by SIPTU as they recon it will mean that Brendan Howlin can use that 800 million moved off balance sheet to give their members pay increases he has promised recently. That’s why Jack O Conner is willing to risk his neck by favouring water charges even though the majority his members are against it. What Jack knows is that the mid and high ranking public sector pay increases for next year depend on the water charges getting through. The majority of Siptu members might be against water charges but a powerful minority need it to go through. Comments are closed.