Wednesday, 10 March 2010

Reply to Dr Constantin Gurdgiev

Nat O'Connor: Dr Constantin Gurdgiev, Adjunct Lecturer in Finance at TCD, posted a lengthly response to TASC’s open letter to the Irish Times. You can read it here. I am a signatory to the letter. In order to have space to deal with his comments in some detail, I am doing so here.

- - -

Dr Gurdgiev, in addition to a series of unsubstantiated characterisations in your post, I identify 14 substantive points which you raise. Feel free to correct me if I’ve taken them up wrong. I deal with them in turn in the order that they appear in the original post.

I am writing from my own perspective as a signatory. Others who signed may have different perspectives and alternative reasons why they were happy to sign.

Before turning to the 14 points, it is good to note that we agree on some things, namely: the need for more value for money from national investment (e.g. a major rethink on Metro North); the need for real public sector reform; some items of capital investment from the ‘Irish Times shopping list’ (e.g. schools); and the need for tax reform. We might disagree on the detail of the above, but at least we can agree that things can’t stay as they are.


1. Construction: “Investment collapse in Ireland is driven foremost by the collapse in construction sector – the sector that accounted for over 70% of total private investment in this country until 2007. So no – the Government has not contributed to this.”

The Government had a major role in fuelling the boom and bust in the construction sector. Hence, they contributed to the collapse. They failed to diversify incentives for investment in order to boost other industries, but allowed the construction sector to become unsustainably large. (Indecon and Goodbody were commissioned by the Department of Finance in 2005 to study the effect of property- and area-based tax breaks. These reports were published as appendices 1 and 2 to the Budget in 2006. Most of these tax breaks have since been discontinued, but too late! There was large-scale deadweight in these schemes, and they contributed to fuelling a ‘boom’ that couldn’t last, followed by the inevitable bust.)

2. NDP allocations: “Investment the authors have in mind is the NDP-related allocations, which are less than 50% about real capital and more than 50% about ‘soft’ investments.”

We would need to target investment into areas with the best multiplier effects for the economy (see also point 9 below), with a mix of short-term (to boost employment) and long-term (infrastructure we need); e.g. using the many available construction workers and cheaper materials post-bust in order to build schools, public transport infrastructure and other ‘hard’ assets. Tapering this investment out over time, as we need to divert the many young people who left school for work on the sites back to education/training.

3. Draconian tax increases: [the open letter authors] “do not mention draconian tax increases here as the contributing factors”.

I’m not exactly clear what your point here is. But tax increases are necessary if Irish people want the same standard of public services as France or Sweden. However, this doesn’t have to be exclusively income tax, it could include taxes on property such as housing tax, which is common to many other countries and is a reliable source of revenue for local government (which often provides primary/secondary education and local primary health care in other countries), as well as other taxes on wealth and a more comprehensive social insurance system. You are complimentary (by implication) about public services in other countries, so presumably there is a reasonable (not ‘draconian’) level of tax than one can be happy to pay, if quality services are delivered.

4. Welfare cuts and deflation: “post-Budget 2010 Ireland’s welfare recipients are still 0.883% better off than they were in December 2008. Is that so deflationary, folks?”

You forgot the effective 2 per cent decrease caused by cutting the Christmas bonus. So, we end up with more than -1 per cent real decrease. You mightn’t agree that it is a regular part of the social insurance that people pay for, but cutting it is still deflationary.

More importantly, we still have a high rate of poverty in Ireland. Behind the inflation figures is the reality that lack of transport makes it more difficult for low income households to avail of falling prices. Plus the marginal benefit of deflation is less; if you were already shopping for the cheapest own-store goods, little difference it makes if brand name goods go down in price. This list goes on, but my point is really that we do a bad job of measuring the reality of poverty and the fact that many people can’t afford all the basics of life (housing, food, heating, etc.). Adjusting welfare payments in line with the CPI or HICP doesn’t add up. A bottom up approach (e.g. minimum income standards) of addressing people’s needs and helping them into education, training and employment would be better for them, and for the economy.

5. Public investment and inequality: “how on earth cuts in public investment are going to make income inequality endemic?”

The original paragraph actually says: “Equally damaging have been the cuts in public investment at a time when private investment has plummeted. This has laid the foundations for a low-growth, high-debt future where unemployment will remain high and inequality endemic.”

That is, the fall of public investment contributes to a low-growth/jobless-growth scenario. That scenario involves high unemployment becoming endemic; and a society where say 1 in 8 people of working age is unemployed (which is the case today) is likely to be an unequal society. Hence, inequality will be made endemic by the Government's failure to put in place a jobs strategy.

6. Private investment: “we should be stimulating productive private investment – that is what creates sustainable jobs and growth. And to do that we need lower taxes, and less borrowing by the Exchequer, so our banks have no Government bonds to roll over at the ECB lending window.”

I agree that we should stimulate productive private investment. For example, we should take away tax incentives for industries that don’t employ many people and use the money saved to fund tax incentives for those that do.

However, low taxes is not the only way to stimulate such investment. For example, we are never going to be able to compete with developing countries for cheap labour. Hence, a well-educated workforce is required, and that requires a significant level of investment in education (funded by tax revenue). Education also protects Ireland from competition by providing our workers with skills that are hard to replicate by low-cost/low-tax economies. We need to build up our comparative advantage in high-tech areas (science and ICT) and move up the value chain; thus making it harder for MNCs to move.

Likewise, we need to invest in transport infrastructure, broadband, etc.

We could raise taxes and still have lower taxes than many continental countries, in order to compensate enough (but not over-compensate) for our geographically peripheral position.

7. Wasteful Exchequer: why “give even more dosh to such a wasteful Exchequer?”

Logically, a government re-directing the economy as we suggest would have changed direction on many things. That must include an end to wasteful behaviour also. I’m all for open decision making and much increased accountability for decisions made by governments and public bodies in order to cut waste.

8. NDP versus the deficit: “To maintain NDP investment at previously planned levels, on top of the current budget deficit we will need some odd €6-7 billion more. To return welfare payments to their 2009 levels, and to reverse pay cuts in the public sector and reductions in employment there, we will need additional €3.4 billion. These are all net of receipts. So the Exchequer will be borrowing some €29 billion this year - 18% of our GDP. What would the Greeks say with their current 12.7% GDP deficit and heading for 10.7%?”

An 18% deficit would of course have detrimental effects on the bond market and the yields Ireland would have to offer, but the proposal of productive investment and job creation leads away from that scenario. Current government policy is taking us there.

For example, the EU's forecasts for Ireland's net general government borrowing deficit are 14.7 per cent of GDP in both 2010 and 2011, up from 12.5 per cent. This is the highest level in the EU. Because of deflationary policies, Ireland now has higher yields than Portugal, Italy and Spain.

I am all for getting the deficit down. But the way to do so, and to lower bond yields, is through fiscal stimulus. (And see point 9 below)

9. Bond yields: “What would the bond markets say?” ... “At what rate would you borrow through these bonds? Current yield is 5%. Greece at 6.3%. To make these bonds attractive to anyone, you’d have to price them around 7%.” ... “Suppose we borrow at 7% for 10 years, invest in new private (not public) enterprises. The rate of survival for start ups in Ireland is, historically, around 25-30% over 5 years. In 10 years – it will be around 15%. To get 10% return on these bonds, the state will need to invest in new ventures that will survive through 10 years slog while yielding over 22% annually! Enterprise Ireland never had this spectacular of a record, even during the boom time.”

The key here is the multiplier effect of productive investment. The various evaluations of the NDP vary as to their multiplier effect, but they are in the order of 2.3-2.6. Let’s take the lower figure (2.3): a €10.5 billion investment programme would yield an economic return of over €24 billion.

A €24 billion increase in activity is about the same as the decline in GDP to date and a bit less than the fall in GNP. Over the course of the recession, taxes fell by €14 billion (even with tax increases). The suggested investment would put most of that back, for an expected tax return of approx. €11.6 billion (to work with the lowerGNP/tax ratio); i.e. more than our initial €10.5 billion investment, thus boosting the economy and reducing the deficit.

10. Private debt: “Most of the non-banking debt – almost 100% of it – in this country is held by private sector firms and ordinary workers. How is paying more in welfare payments going to help deflate this debt? How is public spending on capital projects going to do the job?”

Spending more on capital will employ more people. Not cutting welfare payments will result in less deflation (and hence more employment, e.g. in local businesses). More employment means (a) more tax revenue and (b) less people claiming welfare payments. Hence, although welfare levels may remain higher, less people will be claiming them and so they will cost less as a proportion of the national budget.

And of course, people who are employed will have an easier time paying their debts. So maintaining and boosting employment is crucial to deal with the crisis of private indebtedness.

11. MNCs and exports: Ireland’s “exporting capacity comes from... MNCs, who would flee Ireland” were the open letter’s ideas implemented

I agree that MNCs account for the majority of Ireland’s exports. However, the CSO note that their "sample is heavily reliant upon the large multinational companies especially for exports. The dominance of these companies in our trade statistics may mask the trade performance of indigenous Irish companies." (here, page 9). Nevertheless, 1 in 10 people working in the private sector are employed in an MNC. That’s a lot and they are often ‘good jobs’, with benefits to the local economy through consumption. But it is still a minority. We need a stronger domestic economy too.

In relation to point 6 above, there are many reasons why MNCs invest in Ireland. We need to build on our sustainable strengths to attract long-term, job creating MNCs. They would not all “flee” if Ireland had much improved education, transport infrastructure, broadband, etc. We also have an English-speaking workforce within the eurozone in the European free market. Many other things can attract investment, such as a highly-educated workforce described in point 6 above. Some might flee, others would flock.

12. Low tax, low spend: “I didn’t notice a low tax, low spend economy.” ... “The ... pre-crisis for EU-average level of spending in terms of GNP, and removing the MNCs out of Ireland’s income accounting, leaves the Irish Government in control of over 60% of the entire economy.” ... “Our taxes are now second highest in the EU at the upper margin level. All of this before you factor in some of the highest indirect taxes and charges.”

Re low tax, there are three points one can make. Firstly, The OECD shows that Ireland’s total tax revenue was 31.9 per cent of GDP, compared to an OECD average of 35.9 per cent of GDP. If you just look at the 18 other EU members of the OECD, their average level of tax revenue was 39.1 of GDP. (2006 figures; click on table at end of row showing Irish tax revenue for comparative data).

Secondly, income tax is only part of the equation. The sum effect of consumption taxes and other taxes have to be included too. Ireland may have average or even high levels of income tax, but it has low corporation tax and very little tax on property/wealth. The imbalance of this tax system requires reform to make the overall tax take significant.

Thirdly, the marginal rate of tax is not as important as the actual amount of tax that people pay; i.e. effective tax. The OECD notes (Economic Surveys: Ireland 2009, p. 61) that the value of tax expenditure on income tax in Ireland was three times the average of 22 other EU countries. The marginal rate of income tax may be comparatively high, but anyone earning over 60,000 can avoid a lot of tax through a variety of means, such as generous tax breaks for private pensions.

Re low spending, Eurostat give general government expenditure function (COFOG data here). Ireland’s state spending is 35.6 per cent of GDP compared to an EU average of 45.8 per cent (2007). They don’t give GNP figures, but Ireland’s GNI in 2007 was 86 per cent of GDP (Eurostat figures) – hence Ireland’s 35.6 per cent of GDP spending was around 41.6 per cent of GNP. And was at that relatively lower level the years prior to 2007 as well. Where is your 60 per cent figure coming from? If it is from the current, rather chaotic period, it doesn’t represent a decision by Government to engage in a higher level of public spending... GDP/GNP has fallen greatly, making Government spending look much bigger than its long-term average.

13. Semi-states companies: “does anyone actually believe that our semi-state companies are that good in creating 'new indigenous enterprises’? More CIE? ESB? Bord na Mona? Aer Lingus?”

Semi-states are a mixed bag; some are very efficient, others need real reform. I think we need most of them for the foreseeable future, as I don’t think privatisation would serve the public interest; for example, the privatisation of Eircom seemed to result in asset stripping by a succession of different owners, and weak investment in our telecoms infrastructure. I wouldn’t like to see more of the same with the current semi-states; hence, making them work better is necessary. Changing their governance structures to better serve the public interest would be a good start.

14. Facts and figures: The open letter “established not a single fact” and “provided not a single relevant statistic or estimate” to reinforce its claims.

The open letter (hopefully) reminded readers that there are alternatives, and points out the gaps and flaws in current national economic policy. That’s as much as can be expected in half a page of a newspaper, writing in a style that is hopefully accessible to the general public. You will find plenty of facts and evidence-based arguments on Progressive Economy that deal with many of the above points. And we will be producing more in the weeks and months ahead...

21 comments:

Anonymous said...

It is hard for anyone to disagree with many of the policy recommendations in the letter.-Philip Lane (orthodox, neo-classical economist)
http://www.irisheconomy.ie/index.php/2010/03/08/all-the-wrong-options-have-been-pursued/

Paul Hunt said...

@Nat O'Connor,

Many thanks for taking the time to draft this detailed response to Dr. Gurdgiev's critique of the "open letter". Not surprisingly, it highlights, on one side, a preference for considerable state intervention and control and, on the other, a preference for much less direct state intervention and a reliance on private sector activity. This is a dividing line that, perhaps, may not be bridged, but the engagement should highlight areas where common ground in the public interest may be found.

However, what also needs to be borne in mind is that a government which can command a majority in the Dail and with the full machinery of government behind it won't take the slighest bit of notice of initiatives or debates of this nature. This is particularly true of the current Government which is putting its political survival before the interests of the country. The limited policy initiatives it is pursuing are focused on repairing some of the damage caused by it and its predecessors - and doing so in way that will minimise the pain for powerful vested interests and maintain a majority in the Dail. Those outside this "real coalition" will bear most of the pain and be left to fend for themselves.

It suits them fine when those on the left, right and centre - outide of this coalition - "throw words like stones", as it deflects attention from how political and economic power is secured, deployed and retained. This is their driving motivation and any combination of state intervention and private sector licence will be used to secure and hold that power - without any consideration of ideological or logical consistency.

As I've said before, it's time we woke up and smelled the coffee.

Joseph said...

@Paul - very hard to disagree with you. There is such a huge 'coalition of the disenfranchised' out there..... but it needs a general election to mobilise it unfortunately. If only I could persuade them to put the remote control down, get off their sofas and get out there and protest and get that general election taking place.

Mack said...

@Paul

"It suits them fine when those on the left, right and centre - outide of this coalition - "throw words like stones", as it deflects attention from how political and economic power is secured, deployed and retained"

That is undoubtedly true, but you can't present a strong alternative without having a debate. And debate across the political spectrum might highlight areas where there is some consensus on what the best alternative approaches would be & even if not - highlight the mistakes being made that will inform voting decisions when the time comes (max 2 years)...

Paul Hunt said...

@Joseph,

Completely agree.

@Mack,

My fear is that, if it runs its full course, this Government will have locked in so much legislation, policy, arrangements with the European Commission and the ECB and the international capital markets, etc - all designed to ensure its political survival - that any incoming government will be unable to unwind them and the country will be mired in stagnation for a decade.

Martin O'Dea said...

Paul, I agree with you on analysis of governments position re this debate, or lack of position.

I think we should start a petition/grouping (maybe facebook) of whatever type we wish of people who threaten to return their passports if they don't get an election called before a particular date - say 3 months time.

We sign up to this grouping and make public the sentiment that the department of justice will receive however many 000's of passports with a letter wishing to renounce our citizenship if this period of time elapses without the election being called. I hope it would not set a recurring precedent, and the people's wisdom would see it rarely if ever used again - but I think it is empowering and necessary now.

FD said...

Not exactly difficult to create one of those things. Money where mouth is as money is leaving at such a rate now...sign up to the following
http://www.facebook.com/group.php?v=photos&gid=395840667328#!/group.php?v=wall&gid=395840667328

Eoin O Broin said...

For a detailed analysis of the real impact of Budget 2010 on low income households see here:

http://www.thepoorcantpay.ie/how-the-poor-were-made-to-pay

The report details the real decline in incomes across a range of household types as a result of the budget.

Barry Doyle said...

I think Gurdgiev is right about one thing- if not more. There is an inherent hypocrisy in, on the one hand, criticising the state's role in destroying our economy and on the other, arguing that it is the very same state that should be in the driving seat in terms of getting us out of it.

The corporatist monster that was created during the last twenty years has not been dismantled and Fianna Fail are at once obscenely corrupt and laughably incompotent.

I beleive strongly that the state can and should have a role in the economy and creating a fair society for all who sail on the good ship Ireland. I just have no faith in the current officers, and am baffled that the TASC economists do.

Paul Hunt said...

@barry Doyle,

I don't think there's evidence that Tasc economists have faith in the current officers. To continue your maritime metaphor, the interesting question is why are they reluctant to push the case to give the people the opportunity to make these officers walk the plank.

Oliver Vandt said...

@Barry Doyle
I think that we have to realise that the unions are first and foremost the representatives of their employees. The fact that they only made a few noises about NAMA/bankers AFTER the talks collapsed at Christmas says it all. They weren't very loud even then.

The real failure is among left-wing economists and academics. Most of the running on NAMA has been made by centrist economists or right economists like Gurdgiev.
Most of the running on governance by centrists (I would guess) too.

The left has performed poorly in the present crisis.
The government is responsible for:
An economic collapse.
A banking system collapse.
A public finances collapse.
SIMULTANEOUSLY. There should be outrage and incessant demands for their resignation and dramatic reform. But instead we get a letter calling for a fiscal stimulus, which may ease the situation in the short-term but will not change the fundamental chronic dysfunction in our governance. And a call for better social services which everyone is in favour of.

For the record I do think a fiscal stimulus - but not by increasing the national debt, it will have to involve borrowing against semi-state or state assets - would be, if it was spent right, a good idea.

But all it is is a shot of valium for a chronically ill patient. We need much more starting with a new government. At a minimum we certainly need a public campaign for bank resolution legislation, a referendum on Anglo/Nationwide, and then a repeal of the guarantee for Anglo/Nationwide.

Nat O`Connor said...

-Barry and Paul,

Re Barry's comment on the "State's role in destroying our economy"... And Paul's on reluctance "to push the case to give the people the opportunity to make these officers walk the plank."

We join with many voices who criticise the economy and the State’s policy failures that contributed to it. Yet, we still have work to do among our fellow-critics; for example, while there may be broad consensus that tax breaks to hotels benefitted few people, I doubt there is consensus on recognising the extent or importance of economic inequality as one of the failures of the economy.

But we are also engaged in formulating evidence-based proposals for how we can achieve equality, as part of sustainable economic progress. This is (unfortunately) slower work.

Hence, perhaps there you perceive that we criticise the State’s policies to date, yet are not ‘pushing the case’ for ‘walking the plank’; by which I assume you mean both a general election and major reform of policy-making and implementation in the public service.

In relation to the former, I agree with previous comments on this blog that there is not always a great deal of difference between the policy proposals (and implied analytical frameworks/theories of economics) on offer from the main parties. So, our work is hopefully contributing to building up the evidence and argument for genuinely different policies to achieve sustainable economic progress centred on economic equality.

As primarily a political scientist/political theorist I argue that voting is the last thing we do in a democracy, once we have exhausted all the argument and need a non-violent way to settle our differences about what direction the country should take.

Hence, getting detailed alternative policies into the public domain may lay the groundwork for a more meaningful election process, whenever it comes.

But I agree that we – TASC – and we – Irish citizens – also need a massive review of the way in which policy is formulated and implemented. I’ll keep you posted (if that’s not a blogging cliché) on how we get on with our efforts to engage with the policy-makers...

Martin O'Dea said...

Or we can set a date after which without an election we return our Passports and renounce our citizenship en masse

David O'Donnell said...

@Oliver Vandt

The Irish Left is very weak - look at Green Party - quickest way to a general election is to get GP OUT- what are they doing?__ shuffling the deckchairs.

On economists/academics - you are broadly correct: main critique from the centre & mainstream : the fundamentalist free_mawrketeers (dangerous ideological fools who got us into this mess) are rarely challenged [fair play to Nat for doing so here] - not by the centre - and too few left/progressives in Irish economic depts anyway ..... vast vast majority of Irish academics are supine at the mo - back-bones as rare as hens' teeth...

On Governance - we are a disaster - look at all the shuffling on ALL boards [from semi-state, through HSE, to banks, DDDA, and the Executive: e.g. PWC Chair moves from Anglo before report on DDDA where he was chair is published and replaced by a once high-integrity member of Political Executive ..... main critique here from a handful of media and independent thinkers..... The LEFTin Ireland, as far as Executive (and only 'state can act') is concerned can be safely IGNORED.

@Paul Hunt
YES. We are in a Dictatorship of the Kleptocracy

@ALL

For LEFT to have INFLUENCE demands ACTION. Actions are louder than words. Otherwise - all this is simply wasted abstraction. ACTION ACTION ACTION if to create any credibility.

Oliver Vandt said...

@Nat O'Connor
I understand that TASC have a broad set of goals and that political campaigning is - and I have no problem with this - not one of them. That won't stop me wishing though!

@David O'Donnell
The left can do certain things to improve:
Fintan O'Toole plus sense of humour (I heard him use it on Moncrieff - he was excellent) and minus jargon.
Pat Rabbitte minus sarcastic tone of voice.
Eamonn Gilmore with more variation in tone.

FG have now proposed much more accountability. Labour are the party of FOI (for which Eithne Fitzgerald was strongly attacked, by Shane Ross among others. He should have known better). Labour need to make sure they make the running on this issue.

Above all the opposition need to get an election, to inspire hope of real change and then to deliver an administrative revolution.

Anonymous said...

"7. Wasteful Exchequer: why “give even more dosh to such a wasteful Exchequer?”"
This is a standard response of such as Gurdgiev and just about the only argument they have against Ireland seeking to learn from the model which has been successful in the Nordic countries, Austria, Holland etc.
It is doubly perverse that they should use this as an argument when their political parties of choice - PDs and Fianna Fail - have been in control of the exchequer and the public service for almost all the last 25 years and much of the wastefulness and corruption - from promotions in the VEC system up to the cronyism and thievery in the DDDA - is actively down to them.
Refusing to fund the exchequer/ public services because they are wasteful although this wastefulness is mostly due due to their cronyism, seems to be the sort of double whammy that only Fianna Fail could pull off!

Paul Hunt said...

@Nat O'Connor,
"As primarily a political scientist/political theorist I argue that voting is the last thing we do in a democracy, once we have exhausted all the argument and need a non-violent way to settle our differences about what direction the country should take."

This, I fear, is coming dangerously close to suggesting that citizens should not have an opportunity to vote in a general election until either (a) the left/progressive position has convinced a majority of the electorate to come out in its support at the polls or (b) the constitutional time limit on the Government's term has been reached.

The preference for a Labour-dominated coalition with a rump FF party seems to have atrophied democratic instincts and critical faculties.

Nat O`Connor said...

—Paul Hunt,

That’s a serious misinterpretation of what I wrote.

Again, wearing my political theorist hat, I simply want to make a general point about how we talk about ‘democracy’. A lot of the focus tends to be on the act of voting (whether it is in Ireland or Afghanistan). However, so much of what makes a democracy ‘democratic’ in any meaningful sense is having a robust set of civil and political rights.

In other words, if you only got to vote, you wouldn’t call it democracy. Especially, if like in Burma, the state was threatening people to ‘make the right decisions’ when they vote. In plenty of states voting is not secret and the results are not a genuine expression of people's preferences.

What I meant to allude to in Ireland was that we can engage in democracy every day, not just once every four years at election time. Exercising our rights to speak, gather, criticise Government policy, and so on, is vital to the life and health of our democratic system. And TASC hopefully makes a useful contribution to this day-to-day democratic practice.

A number of contributors to this blog have expressed their frustration with the current Government and have expressed their wish for an election sooner rather than later. But, there is also pessimism about whether any of Ireland’s parties or likely coalitions would make any real difference. Part of the job of TASC, in my opinion, is to spell out a programme of evidence-based policy reforms to convince citizens and the policy-makers of today and tomorrow that there are better alternatives to current policy.

Paul Hunt said...

Several variations of "The point is not just to analyse the world, but to change it" are attributed to a famous theoretician beloved of the left. In a less revolutionary context, the process of policy design, scrutiny, amendment, implementation and review in Ireland requires major reform. There seems to be some limited acceptance of that on this board, but it is an area that needs further debate and action. Absent this and all the theorising about, and analysis of, alternative economic policies is just so much hot air.

Nat O`Connor said...

"the process of policy design, scrutiny, amendment, implementation and review in Ireland requires major reform"

Yes it does.

"Absent this and all the theorising about, and analysis of, alternative economic policies is just so much hot air."

I agree.

And I would hope that TASC's work goes beyond theorising and makes real, substantive contributions to both the "scrutiny" and "review" of existing policy.

Equally, more is needed, and we will be making concrete suggestions for institutional reform, for example in terms of more open government.

Paul Hunt said...

@Nat O'Connor,

I look forward to the "concrete suggestions for institutional reform". And I can understand the pessimism about the willingness or ability of the existing political parties to effect any real change, but, for good or ill, it is they who mediate the ultimate power and authority held by the people. While the primary duty of a majority of TDs is to elect a government and to maintain it in power in a position of executive dominance and the secondary duty of all TDs is to act as intermediaries between their constuents and the bureaucracy, there is little point being pessimistic about, or critical of, TDs.

Up to now it appears that a large majority of the Irish people was happy with this arrangement. But there now appears to be a growing recognition that this arrangement has landed us in the mother of all messes. Arguing the case for alternative progressive policies is all well and good, but they will have no hope of gaining any traction until the Dail decides that it has been delegated the full power and authority of the people and that government is the servant of the people and subject to full and continuing scrutiny by, and accountability to, the Dail. It is only in this way that competing policy options will be assessed and tested and will lead to any possibility that sensible policies enjoying popular consent will be implemented.