Of course, Mary Coughlan's theory of Relativised Evolution or Evolutionised Relativity and the absolutely unfortunate nature of the venue at which she managed to live up to her well-deserved name 'Calamity Coughlan' are straight out of the chapter 'National Embarrassment Exemplified'. It is a serious public blemish on an otherwise worthy event of IDA launching a serious campaign to attract more FDI into Ireland that I wrote about before (here). No need to detail much here, Indo's article speaks volumes, one can wonder now as to what evolutionary process can lead to the emergence of the species so ignorant of basic knowledge as Mrs Coughlan. One note worth making - the fiasco perfectly exemplifies Kevin Meyers' excellent argument in the same paper today (I might not agree with it myself, but Mrs Coughlan has made his case iron-clad).But Brian Lenihan's lack of grasp of simple realities of public finances and economics is as breathtaking as Mrs Coughlan's lack of basic erudition. After weeks of being fed drivel of FF backbenchers' and hacks' version of economic ("Nama bonds are not debt", "We will get cheap money from ECB", "ECB supports us" etc), it seems our own Finance Minister got convinced that there is such a thing as a Free Lunch. Per Indo's article here, Lenihan "gave his firmest pledge yet that there would be no tax hikes in the December Budget. And Mr Lenihan challenged anyone who doubted him to "watch my lips"... Mr Lenihan said he was committed to introducing a carbon tax... But he gave his clearest indication yet that the Government would not bring in a property or water tax this year. "I am not aware of any other (new tax hikes)," he said.
Ok, three Indo reporters (including senior ones) failed to actually query the details of this statement the Minister made. But the very fact that Lenihan actually said what he did is a testament to the fact that this Government has no real financial brains in the Cabinet at the time of fiscal and financial crises. None at all.
Per statement itself, Minister Lenihan obviously does not consider introduction of the Carbon tax to be a new tax. Presumably, he lived so long outside the real world, in the world of chauffeur driven Mercs and vast taxpayer-paid perks that he might be under the impression that Carbon tax already exists, so 'introducing' it will not constitute an imposition of a new charge on taxpayers.
The Minister also indicated that he has seen no other tax proposals (other than the Carbon Tax and Property Tax). Has he read his own Commission for Taxation voluminous report? Or has it escaped his field of view as the Lisbon Treaty volume had escaped Brian Cowen's view earlier?
Finally, the Minister has to be living in the surreal world where a €20bn-plus shortfall between tax receipts and liabilities can be covered by something other than taxes. Indo's journos refer to the possibility of €4bn savings on the expenditure side as the means for avoiding new taxes. Have they done a simple sum ever before? Has Minister Lenihan done a simple sum ever before?
Even if the Government does deliver on €4bn in savings, and even if part-year measures announced in April 2009 budget continue through the full year 2010, the entire savings will not be able to cover a quarter of the fiscal spending gap. If the Government commits to fully ending all capital expenditure in 2010 and if the economy grows by 5% in 2010, the expected fiscal gap will still be in excess of €8bn in 2010.
This money will have to be borrowed in the international markets. The roll-over of a vast sea of short-term debt issued in 2008-2009 will have to happen. Is Minister Lenihan really buying the idea that these state liabilities - some €30bn worth already accumulated, plus Nama's €54bn expected plus the ones awaiting NTMA's printing press on the back of long term unemployment increases into foreseeable future can be 'deflated' away at the current rates of spending and taxation without raising new taxes?
Well, only in the world where Einstein authored On the Origin of Species, perhaps?
What more can be said or written about these hapless Gombeens? Is there such a syndrome as Outrage Overload? Certainly I feel it. We are being condemned to years of moaning through the likes of Liveline. There surely must a Quixotic feeling being an Economist in Ireland these days. At least it can be said the government is productive in the field of producing lots of financial Cassandras.
ReplyDeleteIs now a bad time to remind your readership that it was she and Willie O'Dea who were sent over to talk to Dell?
ReplyDelete...
tumbleweed
...
I'll get my coat.
Not to quibble too much, but water rates can be passed off as charges. If a property tax is brought in on the basis of a flat charge, then it too can be called a charge. Mr. Lenihan only talked about income taxes.
ReplyDeleteHe is giving you a fiver while taking a tenner out of your back pocket...
Here is more of it. http://www.irisheconomy.ie/index.php/2009/09/16/nama-from-heaven/
ReplyDeleteWillie O’Dea, Frank Fahy, et al are spinning BS so fast I am surprised they are able to stand up.
I am at a total loss when it comes to the current Government, they really don’t seem to care about the country at all. NAMA is reckless in the extreme. They say that NAMA will break even, IF property prices rise by 10% in the next 10 years. Not a lot you might say. But look at the underlying economy.
They will introduce a property tax that will depress prices further.
NAMA will depress prices due to a large overhang of property waiting to be sold.
Taxes rates are rising.
Tax receipts are falling.
GDP is falling.
Unemployment is rising
National depth is increasing exponentially.
The Government is about to reduce it’s spending.
Clearly they do not know what they are at; some of their policies are in direct conflict with one another.
Are they about to mess this country up for generations?
> National depth is increasing exponentially.
ReplyDeleteIt sure is! What's that rule about what to do when you find yourself in a hole - stop digging ? Or through Coughlin in with another shovel ?
And it finally becomes clear, Constantin's mask slips - not about independent, rational analysis - just anti-FF drivel.
ReplyDeleteSo when FF get it wrong (which they have done on many many occassions) you attack under the guise of "fair comment" but you ignore any correct actions taken by them, ignore all the absolute drivel being posited by the other parties and finally revert to name calling.
I thought the name calling you stooped to with Alan Ahearne was just professional snobbery (academics tend to sniff somewhat at their members who "take the shilling" as you put it" but it's obviously more accurately a personal inabilty you have to separate your economic thought from your personal dislike of people and their politics.
Pity really - could have been a good blog.
Dawkins is in town I think,maybe some should set them up on a date.
ReplyDeleteAdrem, actually, no - I have no ideological view on FF for several reasons:
ReplyDelete1) FF does not have ideology;
2) FF has heterogeneous membership and Parliamentary Group which combines people whose incompetency I loath and people I respect and am willing to give the benefit of a doubt;
3) Opposition does not provide much of a viable alternative.
My views are personal for a number of reasons I have outlined before. My views of Mrs Coughlan's incompetence are further amplified by the unfortunate timing and place where the latest manifestation of her shortcomings came to be expressed. My views of Mr Lenihan's strange behavior (and I say strange because I would like to extend to him the benefit of a doubt, but am unable to rationally explain the contradictions contained in his statements) are personal because his hands are personally inside my family pockets.
I ignore the absolute drivel posted by other parties - true - because it is drivel and because my objective is to address policies, not proposals. On many occasions when these parties presented serious policies, I was critical of them and will be on similar occasions in the future.
As far as my economic thought goes, as with my dislikes of specific policies - I never take any partisan positions.
Best, C.