Down with this sort of thing

Various commentators, both domestic and foreign, have been arguing that Ireland’s adjustment process is difficult enough as it is, without needlessly saddling ordinary citizens with other peoples’ debts.

Brian Lenihan has had enough, calling “for an end to discussions about Ireland defaulting on its debt, saying the debate has done “huge damage” to the country.”

People should not be surprised that there’s a huge erosion of trust in the Irish banking system when we’ve an endless debate on whether we should be defaulting on the payment of our obligations,” he said.

I hope the FT and the rest of them are listening. You may think you are speaking up on behalf of Irish (and EU) taxpayer interests, but you’re actually doing great damage. (Exactly why deposits started to leave the Irish banking system months before this debate began is unclear to me, especially since no-one has suggested burning the depositors, but that is another issue.)

Careful now.

The Green Budget

Many things have been and will be said and written about Budget 2011. I just want to note that income taxes, and hence labour costs, have again gone up even though export-led growth seems to be our best hope of getting out of this mess.

Much has been said too about the political astuteness of the Green Party. They did make a mark on the 2011 budget, though. There are the limited increase in university registration fees, and the rumoured preference of Metro North over Dart Underground (see the CILT review for a different opinion).

A number of exemptions, reliefs and credits were removed from the income tax code. A new one was introduced: Income tax relief for energy efficient measures in houses. Up to 10,000 euro can be deducted at the standard rate, for a tax credit of up to 2,000 euro. The cost in 2011 (to be paid in 2012) is estimated to be 30 mln euro, so at least 15,000 households are expected to avail of this.

Note that the carbon tax is still there, and the subsidies for energy efficiency improvements and renewable energy were not removed. We thus moved from triple regulation to quadruple regulation.

The capital allowance for energy efficiency equipment for firms has been extended too, at an estimated cost of 6 mln euro.

I would not have introduced those measures (+36 mln). I would have cut the subsidies for green energy (+170 mln). I would have removed the exemption of coal and peat from the carbon tax (+150 mln). 350 mln euro is not a lot, but every little helps.

Megan Greene says Ireland should consider leaving the euro

The Economist Intelligence Unit’s Ireland analyst says Ireland should consider leaving the euro, since the major costs have been or will be incurred anyway.

She also says that this would be politically beneficial for a FG-Labour government. Perhaps, but I think it’s almost inconceivable that FG would want to leave the euro, whatever about Labour.

But the political arguments will remain, and who knows: Gerry Adams could be the Leader of the Opposition. Interesting times.

Ireland to rescue world from warming

or so Frank McDonald writes

the piece is about the Open Climate Network, and you can check for yourself which Irish institutions are involved

it also remains to be seen whether the Open Climate Network has any impact

Class Sizes Revisited: Denny and Oppedisano

While we are on the subject of what really matters for human welfare, many people expressed approval of the government’s decision to not allow class sizes to increase further. Kevin Denny has been talking about this issue for several years and basically arguing that the evidence on class sizes is mixed at best and that it is more of a teacher workload issue than a pupil welfare and performance issue. He has just put out a paper with colleague Veruska Oppedisano testing the effect of classsizes on pupil performance. According to his results, bigger class sizes are associated with better performance in the PISA data, even controlling for a wide range of controls and using different estimation techniques. I think Kevin would be the first to say that you should be careful about overinterpreting any individual data analysis but it certainly points away from any simplistic assertions about the effects of class-sizes.