Tuesday, June 22, 2010

The problem with freeloaders

Brian Lenihan has today put it up to those of us who still have jobs. We all have to stop being freeloaders according to the Minister.

If you believe Brian, and many dont, there is a perception in Europe that if we did not tackle wage rates here we were "freeloading on the euro". Public and Private sector wages are out of line when it comes to Europe.

Now there are just a whole load of things objectionable in that statement.

Firstly the contention that our wages are high in comparison to Europe. Michael Taft nailed that lie forcefully recently demonstrating that our Public Sector wages are not the highest in Europe. In fact they are far from it. Looking at a combined Public/Private sector we see that again our wages are again lower than Europe in general. We have a difficult economic situation to face but half-truths wont help solve it Brian.

And by the way Brian what about this report from December 2009 which shows that the very very top of the civil service including an Taoiseach and your good self are all over paid when compared to Europe. Leave the ordinary people out of this and look at your own pay packet first

Secondly you have to admire the brass tack on a Fianna Fail minister talking about freeloading. Full stop. But to do it on the day when Brian Cowen finally admitted what we all know - that the money lent to Anglo will never be returned nor ever yield any return to the state, is either incredible neck or really bad luck. I suspect the former.

Thirdly Brian Lenihan has made much noise of the perception of the markets, the need to court market opinion etc. When he extends that forming policy in responses to the perception in Europe we should be equally worried

The entire strategy of courting market opinion has been a flaw judged by the sole useful criteria - the cost of Irish debt. Paul Krugman comments:

So, I’m glad to hear that Ireland’s stoic acceptance of austerity is reassuring markets; it must be true, because that’s what everyone says. Because if I didn’t know that, I might look at the data and conclude that markets actually have less confidence in Ireland than they do in Spain, and that austerity in the face of a deeply depressed economy doesn’t actually reassure markets at all.

But hey, what are you going to believe: what everyone knows, or your own lying eyes?

Who are we going to trust? Brian Lenihan and his freeloading party or hard economic fact.

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