The dangers of a head-in-the-sand approach
Amongst other things, he described the construction boom as coming to a shuddering halt and lamented the timing of his arrival into the Department of Finance.
It is very hard to argue with these two assertions, but reaction of some to his comments is hard to understand.
Maybe it reflects the fact that we are just not used to politicians being honest and telling the truth. Brian Lenihan was being honest and was telling the truth. Some people have difficulty with that, but that should be their problem, not Brian Lenihan’s.
George Lee in RTÉ has also attracted considerable opprobrium in recent times, and I certainly get a strong sense he is being blamed by some irrational souls for Ireland’s economic difficulties. He is merely reporting the facts as he sees them and, if people have a problem with that, then it is their problem rather than George’s.
In my own case, I have been accused several times recently of being as gloomy as RTÉ’s economics editor, amongst other supposed insults. Indeed, a current ad campaign for a make of car is based on the notion that economists thrive on bad news. That is one car that will not be on my shopping list the next time I feel brave enough to buy one.
It is the role of commentators and economists to report the facts and interpret them in the best professional manner. That is what most of us have been doing and if people do not like it, then so be it. It is extremely dangerous to keep one’s head buried in the sand and ignore the facts.
Perhaps if our policy makers had cottoned on to the fact the economy was dependent on a residential housing boom three years ago, and had pursued policies aimed at ensuring that a vibrant economy would operate alongside the housing economy, we would not today be faced with the growth recession just forecast by the ESRI.
The problem is that in recent years the residential housing sector was throwing off thousands of jobs, buoyant tax revenues and lots of economic activity. Such was the buoyancy and prosperity generated by the housing sector, the Government did not appear to believe there were any problems in the economy.
We are now paying the price for that lack of vision and unwillingness to face up to the facts. That is a pity. We all know the health service is in a total mess and will be subject to probable cutbacks over the coming months. Of equal concern is the state of education.
Earlier this week we got media reports of a Department of Education memo stating it is facing an unprecedented crisis in school accommodation. In a civilised society, this is unacceptable and displays a lack of vision, planning and ability. If these problems were not addressed during times of plenty, what hope is there during times of scarcity?
News has just broken that Hibernian Insurance is going to outsource 580 jobs. This is globalisation at its most savage and is just part of a trend that has been going on for a decade or more and that will continue for decades to come. The only way to respond to the migration of jobs to cheaper locations is to become smarter and ensure the quality and productivity of the labour force give us a strong competitive advantage. The issues in our education system would not fill one with confidence in that regard. If education is not afforded proper attention, then we are going nowhere fast.
We should just face up to the facts and respond to them in the appropriate manner. At least Brian Lenihan is facing up to the facts and is not afraid to air his views. That is a welcome start.
Jim Power,
chief economist,
Friends First
