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Monday, September 24, 2012

Ireland: Howlin -- Minister for Status Quo - - gives up on reform

Colm McCarthy, UCD economist, wrote in The Sunday Independent yesterday: "Spare a thought for Clare County Council. On Monday, it emerged that the council was seeking confirmation that the €100 household charge had been paid by families seeking student maintenance grants.

Their lead was being followed by other counties. The typical maintenance grant for a student studying more than 30 miles away from home is €3,025 per annum. In addition, students at colleges in Ireland face fees which are only a fraction of the full cost of third-level education, so there is a double-subsidy for those receiving the maintenance grant.

Yet the council was roundly denounced by several TDs for checking whether the €100 due from each household had been paid. It is truly remarkable that politicians, including representatives of supposedly progressive political parties, can countenance the sheer chutzpah of applying for a €3,025 grant while dodging a €100 charge that is legally due."

Finfacts article: Irish Economy: Minister for Status Quo again targets future workers

The following are 3 comments I made on the Irish Economy blog thread on the article:

1. The argument about the impact that cuts in public spending could have on consumer spending is self-serving as is the one trotted out about a payoff for industrial peace.

So Anglo Irish Bank (IBRC) should remain one of Ireland’s biggest indigenous firms on that basis with 1,000 employed when 100-150 at most should be able to handle the ‘business’ of a shuttered bank? It’s out of business.

Read the Croke Park implementation body’s claimed ’savings’ from bubble levels while the Minister for the Status Quo gets away with stressing pay savings while ignoring rising pension costs.

It’s not only the PS are part of the continued misgovernance but sheltered professionals are continuing to make a killing from the wreckage of the collapse.

GPs who are also drawing from the public trough, have jacked up fees since the crash for private clients.

Up to now, the unemployed and tens of thousands of self-employed (many not by choice in the modern economy) are struggling at subsistence level and those who want to maintain the status quo, are in effect telling them to eat cake.

You are weak; you’re not organised and you have not the muscle of the IFA to put the frighteners on that specie known as the ‘rural TD.’ So be happy with your lot.

It will soon 6 years since the onset of the US subprime crisis; many are clueless as to where significant numbers of new jobs will come from.

Force majeure should have been declared on public spending across the board. Drip, drip drip as hope is drained from those in the private sector who should be given the opportunity to see some hope and set up startups.

Most new net jobs in a modern economy are created by firms up to 5 years old. Surviving firms more than offset the high level of failures.

2. At the Fianna Fáil Ard-Fheis in 1970, Seán Flanagan (1922 – 1993), minister for lands, who was captain of the Mayo All-Ireland football winning teams in 1950 and 1951, did a rare thing in Irish politics. He called publicly for his department to be abolished.

It was indeed rare for an insider to put the public interest above his own and this month, The Sunday Independent reported:

The president of University College Cork, Dr Michael Murphy, who is paid €232,000 a year, has described how the heads of Irish universities “are as challenged at paying their bills as anyone else”.

He continued: “Many people won’t understand this because of the scale difference. But the stress on people is the same.

This man’s background is in medicine.

The politicians are unfit for purpose and so many others at the trough are either in denial or see self-interest in keeping the trap shut.

James Downey wrote in the Irish Independent on Saturday:

If the Government had come into office promising to slash and burn and started slashing and burning straight away, people would have accepted it on two conditions.

The first is called, not quite accurately, fairness. People are not so foolish as to expect perfect fairness, merely the perception of a government doing its best.

Secondly, a reason to believe in the possibility of recovery. In the last 18 months the population has felt it has seen that possibility receding instead of coming closer.

Irish long-term unemployment - - at least a year or more — is at 60% of the total. Along with Slovakia, this is among the highest rates of the 34 mainly developed member countries of the OECD.

The think-tank estimates that Ireland would need to create 307,000 jobs to return to boom time levels of employment..

“What crisis?”

The lack of urgency is striking. Slow-motion remains the default mode.

Last year the OECD said the Irish school system is characterised by limited accountability mechanisms. It said the inspection of the work of individual teachers falls almost exclusively on primary teachers on probation, and that limited data on comparative school performance is made available to the public.

The OECD said the authorities should set up mechanisms to systematically evaluate teachers’ and schools’ performance, and make the results public when adjusted for social-economic background. It added evaluation results should have implications for career progression, and inform any needed corrective action in relevant areas - notably extra teacher training at primary and secondary level, especially in maths.

How dare they run down our fine systems!

3. Sweden and Finland reformed when they had to. In conservative Ireland, the tide will have to rise higher to imperil the thresholds of the comfortable.

A lost decade or more is going to be the cost of a failed governance system and a parish-pump electorate.

A lot of things can be tedious. Getting to the 100th rejected job application must be the threshold of motivation for some. Nevertheless, high unemployment is going to be a reality for years.

Ireland produces little wealth itself. Excess payments made on the froth of a housing bubble are a rent on the rest of society — medical consultants, PS, lawyers.

State guarantees of employment come at a high cost like banking guarantees.

There is little general interest in reforming failed systems. Many want bizarrely named ‘centres of excellence’ on their door steps, as long as someone else pays.

Productivity data is faked because of MNC distortions.

A small number of people account for the bulk of exports. So where will hundreds of thousands of new jobs materialise from to support bubbletime costs including future pensions?

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