Saturday, May 19, 2007

Irish General Election 2007: Monopolizing Credit

An Taoiseach Bertie Ahern canvassing in Dublin South Central

It's rare for politicians in power not to claim all the credit for good news, as if life just began on their entry to office, while responsibility for bad news is deflected elsewhere.

For example Michael McDowell claims to have invented the Celtic Tiger but there's no chance that he would accept that his comments on stamp duty reform last September had a scintilla of impact on the second hand housing market.

Business CEOs (hired hands as distinct from entrepreneurs) tend to be the same. It's rare to find people like US investor Warren Buffett who recently attributed a big jump in earnings to luck because of a benign hurricane season - rather than management brilliance.

There is however a danger in believing one's own propaganda.

Julius Caesar reputedly said that the General who rests on his laurels, is usually wearing them in the wrong place.

We see the results of the delusion of the PDs and FF as creators of an economy that is "the envy of the world" and the rest of the related blah-blah.

With that sense of smugness, why get too worked up about infrastructure and services?

Why worry about putting in place reforms in governance/public sector/planning/squeezing out of the productive sector through fueling property mania with loads of tax incentives that were not necessary and so on/ when the path to permanent prosperity has been found?

When did ministers have to come through Dublin Airport on a Sunday night after 11:00 pm like the common passengers - hundreds coralled into a narrow passageway leading to a makeshift passport control section - then to eventually get outside with a triple column queue for taxis extending beyond the Arrivals building?

Should they be really surprised that after 10 years, a grateful people who embarked at an efficiently run airport, are not willing to kiss the hemlines of their cloaks?

Low Corporation tax, which at a zero rate on exports was introduced in 1956 and the takeoff of the modern tech sector in the US, plus a semi-tax haven status for other income, rather than income taxes ensured that Ireland got 25% of greenfield US direct investment for a number of years in the 1990's with 1% of Europe's population.

William Prasifka, the chairman of the Competition Authority, said in 2006 that “in too many areas, Ireland has not willingly embraced competition. European Directives forced the introduction of minimum levels of competition in the telecommunications and energy sectors. In other areas, such as taxis and pharmacies, legal advice or court actions precipitated change.”

Businessman Feargal Quinn said said earlier this week, that it “simply beggars belief that a State that could develop such an enlightened attitude to scientific research should be the very same State which through inertia and ineptitude has allowed Ireland to languish year after year in the lower reaches of the international league of broadband penetration”.

The key really is that aspirations and allocating funding and cutting taxes, are the easy part.

The Department's of Micheál Martin and Dick Roche are still churning out press releases on funding allocations - but don't ask them about water or why venture capital in Irish innovation companies fell to €4.2 million in Q1 2007 - but we may have a world-class knowledge economy in 6 years.

And what have FF and the PDs to say about our 1920's system of governance where the buck stops nowhere?

The PD boast is that income taxes were reduced a property boom, while the overall tax burden remained unchanged and the state of Ireland would be far worse with FF in power alone, with builders calling the shots.

How hollow it will sound in times to come - we cut waiting lists in the last 2 years of the 10 year period because Micheál Martin had ended up in Rip Van Winkleland wading through the 145 reports he had commissioned as Minister for Health over 4 years

As to implementing significant public sector reform -- oh the OECD is going to tell us what has to be done later in the year!