Tuesday, 28 February 2012

Referendum on the Austerity Pact

Tom Healy: With at least one Referendum on the Austerity Pact imminent over the coming months one looks forward in hope to a debate that will draw on values, facts, evidence and reasoned analysis. We can look forward to discussions on cyclically adjusted current balance. Macroeconomics may yet flourish. It would be interesting to hear from at least one macroeconomist anywhere who thinks that the Pact makes economic sense. The debate will be, rather, about choices and options.


Paul Hunt said...

@Tom Healy,

This is not a referendum on austerity. The Irish people will be given a choice between the vision of a more integrated EU core with increased democratic safeguards and incereased democratic legitimacy and the reality of an island embedded in the trans-Atlantic political and economic space with a distinctly different tradition of law, democratic governance and individual liberty.

And when you hope for a debate based on values, facts, evidence and reasoned analysis I presume you don't mean the kind of 'analysis' which Michael Burke used to turn up his 'crock of gold' in the previous thread. This wasn't the first time such nonsense surfaced on this blog, but it is never disowned and, occasionally, is simply pulled without acknowledgement. And it does a huge disservice to the intellectual credibility of the 'progressive-left' and damages the ability to make the reasoned case that needs to be made.

Tom Healy said...

@Paul Thanks for your comment. Lets see what the choices and options are. One merit of the treaty draft before us is that it is relatively short and accessible even if nobody has a clue what 'structural deficit' means except of course the EU Commission which does measure such things. On the basis of current fiscal austerity the PS 'structural' deficit (optimistically) is set to decline to a little over 3.5% of GDP. If we go with that version of the facts there is 3% more of GDP to be slashed - nay - 5 or 6% at least to yield net 'savings' to the deficit. Keynesianism is buried and outlawed and Europe stays in depression. I agree with H Kohl we need more Europe and not less. But not a neo-liberal Europe that is destroying the basis of human liberty rights and participation.

Paul Hunt said...

In Keynes’s day there was huge scope to expand and extend the national common bond shared by all citizens to pay for a huge expansion in the state’s role in society and the economy - and to secure external financing. Keynes made the politically-convincing policy case to exploit this scope to save capitalism and the mixed economy from the depradations of the nutter Anglo-Saxon right and of corporatist fascist, on one side, and communist totalitarianism, on the other. But that was then. This is now.

Prior to this crisis the limits were being approached - and exceeded - in some countries. Paying to clean up some of the mess created by the bankers’ greed and folly - an inevitable mess whose genesis was fully authorised and sanctioned by governing politicans of all complexions and regulators and policy-makers - has pushed many economies beyond these limits.

The intent of this 'compact' is to restore some order and balance, to repair and strengthen national common bonds so that the consent of voters is aligned with the role of the state, to match solidarity with national responsibility - and to reduce the ability of the international bond market participants to intimidate everybody.

In my view it is quite wrong to characterise this is 'neoliberalism' that is, allegedly, destroying the basis for human liberty, rights and participation. You might usefully consider this assessment of the German 'social market':

The German liberal/cetre-right abhors the Anglo-Saxon financial lunacy that has wrought so much havoc - neo-conservatism opertaing under a neo-liberal flag of convenience - and what is being proposed is a genuine attempt to repair the damage. It may not be precisely in line with the SPD's vision, but it not so far removed to compel it to mount the opposition to it that the so-called progressive-left in Ireland are mounting. Should that not give some people pause for thought?

And, to conclude, I am genuinely torn between the choices on offer - and which I outlined in my first comment. This is a profoundly existential choice for Ireland.