Tuesday, 2 February 2010

McCarthy on fiscal correction - advice to Scotland

Slí Eile: Never shy to expound, economist Colm McCarthy, of Bord Snip fame imparted wit and neo-liberal orthodoxy last week in Edinburgh. See an account of his address here. (Does anyone have the full text somewhere?) He declared:
It’s getting public opinion and the opposition parties and the broadsheet media on board and getting them to accept and understand that we’re not doing this for fun, that we’re in a hole and that the quicker we start dealing with it the better and that there has to be a fiscal consolidation and all this kind of stuff.
Looks as if this approach had a large measure of success in 2009 - except that the fiscal deficit is still hanging where it is and the prospect of more deflation, more unemployment and more spending cuts will see to a continuing debt trap.

9 comments:

kevin denny said...

Why the sarky tone? Has it occurred to you that mayhe he's giving his honest professional opinion and that maybe he even knows something that you don't?
From the figures that were made public, McCarthy wasn't paid much for the "Bord Snip Nua" work. So whether you agree or disagree with him, I see no basis for the snide remark. A good reason to stay anonymous.

Slí Eile said...

@ Kevin OK point well taken. Sorry it this post detracts from the main issue here - what we are told is that the Bord Snip was a 'aboslutely political' and that the softening up process was in train for some time. This process is having a damaging effect - I claim - on economic activity and social fairness. There are better alternatives. Lets agree/disagree on that.

oliver1vandt said...

@Sli eile
I agree with McCarthy on the need to cut spending. I disagree with how he frames the need for a bank inquiry as having nothing to do with examining the competence of the government. I trust that when he talks about giving the public a "narrative" he doesn't mean it to be other than the full, blunt truth.

Michael Taft said...

Kevin and oliver1vandt - there is an important issue here. McCarthy has asserted that his arguement is political, 'aboslutely political'. To this extent, we are entitled to debate whether his proposals for cuts are politically right or politically wrong. However, An Bord Snip went further than that. It claimed the cuts = savings to the Exchequer. This requires an economic analysis - and on this basis it fails. Cuts do not equal savings, nor do they necessarily = reduction in the deficit burden which was the remit of the committee. However, the committee was indifferent to the economic and fiscal implications of its proposals. Why? Because it was 'aboslutely political'. In this respect, the committee was highly misleading and damaging to the public debate; no more so, than separating the political from the economic.

Paul Hunt said...

@Michael,

It's a bit rich for you to be criticising Colm McCarthy and lecturing the rest of us when the unions are angling to enter negotiations with this entirely discredited Government thereby exposing the union movement to further humiliation, workers to more pain and allowing the Government to burnish its battered-to-the-point-of-almost-non-existence governing credentials.

Michael Taft said...

Paul - I should have clarified my comment further. I actually applaud Colm's admission. We now know that the principle behind the proposals of An Bord Snip was neither economically nor fiscally grounded (how could they? many of them are economically damaging and fiscally irrelevant) but rather poltiically grounded. My only disappointment is that he didn't make this clear when the report was pbulished. Still, I'm sure Fianna Fail is grateful for his 'political' assistance.

Also, how am I 'lecturing' anyone. I'm just making a contribution. And what's my contribution got to do with the negotiations/non-negotiations between the Government and public sector unions? I don't understand the connection.

Paul Hunt said...

@Michael, Colm McCarthy, if he so chooses, is well able to defend himself, but, in the context of a partial account of his presentation, I think one should draw the distinction - which you fail to do - between a "political" rationale for the cuts proposed and the communication of the requirement for, at least, some of the proposed cuts to citizens. This, in essence, is a political task. I believe Colm was focusing on the latter, but you are perfectly free to disagree.

And the connection is "political". If you condemn the BSN Report as being politically motivated, you cannot disavow the political impact of the apparent "talks about talks" in which the public sector unions are engaged. Any engagement will confer legitimacy on a Government of which, it is clear, the majority of citizens wish to be rid. Of course, if you believe there should be no further engagement and every effort should be made to remove this Government, I will be the first to applaud.

Michael Taft said...

Paul - I really don't understand the connection between the comments I made on this thread re: Sli Eile's piece and the IR negotiations, or lack of, between the Government and the public sector unions. How does this IR negotiation impact on either (a) McCarthy's avowed political intent and/or (b) the Special Group's proposals that (and you're free to disagree with this) are ecoomically damaging and fiscally irrelevant.

Paul Hunt said...

@Michael,

No problem. My fault. Just checking to see if there was an underlying consistent, intellectually robust, politically coherent rationale for these sporadic attacks. I have my answer now. Thank you.