Tag: boom

‘Visionary’ economic plans are simply a list of cuts

10th July 2008

[youtube=http://www.youtube.com/watch?v=o0Z1TjQzvgk]

Yesterday evening, the Seanad had an opportunity to discuss the current economic situation we now find ourselves in. We briefly discussed the subject last week and were told that a ‘visionary’ plan would be instigated this week. What Mr Cowen and Mr Lenihan brought forward this week was a list of cuts that were hiding under the term ‘savings’.

Where is the vision we were promised?

For weeks now, we have been told that the economic woes which we are now experiencing have been internationally generated. How can a government claim credit for a good economy but blame the international situation for a downturn? In development after development, whether large or small or in urban or rural areas, it massively over-incentivised the construction sector and failed to direct prudent investment into areas which would have yielded long-term results for the economy.

Above, you will find a video of my contribution to the debate.

More :: You can read the full debate by clicking here
More :: ESRI report shows that this year’s recession is homegrown (The Irish Times)

It’s now clear - we blew the boom

24th June 2008

From today’s Order of Business:

In order to have any relevance at all, this House needs to debate the ESRI’s recently published quarterly economic commentary. We are talking about the first recession in this country for 25 years. We are not talking about speculation but about a clear forecast of an increase in unemployment and emigration. Two significant aspects of the current situation emerge from the ESRI report. First, the current recession is almost entirely home-grown. That is the factual position as outlined by the authors of the ESRI report. The alibi, explanation or excuse that is sometimes given in this House - that it concerns external, overseas factors - is not true. Therefore we must leave that aside because it has been proven to be incorrect.

We are talking about factual material which we need to understand before we can have the debate. The factual material, which is not speculative, points without question to the reality that this is a home-grown recession caused by developments over which this country, and the Government in particular, have substantial power to change. Members on the Government side may not like it but we need to face the facts first and then have the debate.

Second, the ESRI report’s commentary makes demonstrably clear that we blew the boom.

We had an opportunity to do otherwise. We had years of self-satisfied, smug commentary from the Government, including the then Taoiseach, about cranes in the sky, saying that everything was going to be great. We missed the opportunity, however. I want a debate on this report.

We blew it in this sense that we passed up the opportunity we had in this country to set down the basis for dealing with a downturn when it came. We did not do that. We simply decided not to do it. We did not fix the roof of the house when the weather was good and now we must face the bad times. Clearly we need an opportunity to debate it in this House.

If I can reflect back on what is sometimes regarded as the Taoiseach’s Angola moment when he was upset about having to deal with the Department of Health and Children, it would appear now that the Minister for Finance, Deputy Brian Lenihan, is having an Angola moment about having to deal with the challenges in the Department of Finance. They need to get together quite lively to put together a clear proposal on how we will proceed in the matter. They first need to face up to the fact that it would be unthinkable for them to go ahead and take pay increases in the face of a situation where they demand that people face pay cuts. Clearly, we need a debate on the matter.

More :: ESRI warns of recession, job losses and renewed emigration (Irish Times)

‘One cannot state the Government created the boom but has nothing to do with the issues we now face.’

9th April 2008

We have not yet begun to get our heads around what is happening in terms of the economic situation. Last week, the greatest increase in unemployment since records began was reported. We have a veritable collapse in the domestic property market in this city according to anecdotal evidence and what has been written. This morning, I saw a “sale agreed” sign on the south-side of Dublin. It was a bit like the first cuckoo of spring but I am not sure whether it will be followed by many more cuckoos. The construction industry will be seriously impacted by this.

According to comments made today by one commentator, David McWilliams, who is hardly a socialist firebrand, we have invested so much in property in recent years that we have exhausted the capital base in the country. We have a serious situation facing us. It is not an exaggeration to describe it as a crisis.

Again and again in the Seanad I have heard the Leader and others reeling off the achievements of the Government. The Government has had achievements but if it is correct to state, as I anticipate the Leader and others might, that the economic downturn is largely the result of international forces, it is incorrect to state the Government was responsible for the boom. As I pointed out before, one cannot have it both ways. One cannot state the Government created the boom but has nothing to do with the issues we now face.

In a compelling piece, David McWilliams also points out that at the heart of the job over which the new Taoiseach must preside is the stunning accumulation of wealth at the top of society. He recalls last year’s wealth of the nation report from Bank of Ireland. The top 1% in the country own 20% of the wealth. The top 5% own 40% of the wealth. Let us pause to consider the fact that 40% of the wealth of the country is owned by the top 5% of the population. This is one of the legacies of the boom and an issue with which we must wrestle as we consider future economic policy.

It is not enough to state we improved social welfare in line with or above inflation. We must consider the opportunities we will present, spread, foster and offer to the young people, whether in Limerick or elsewhere, caught up in social problems and crime. Will the weaker in society suffer with a downturn in the economy? This must not be the case. We must examine this splurge of wealth at the top, whether it is symbolised in the Galway tent or elsewhere. We need to turn this around and ensure economic policies develop the country.

Let us have all issues open, including this extraordinary inequality, which is one of the unfortunate legacies of the boom.