Wealth in a downturn

Paul Sweeney: Most of the banks and financial sector economists, especially those paid under the banks’ Marketing Budgets (as apposed to those bank economists who are paid to add value to the banks’ decisions-making) have gone to ground. So it is surprising that the NIB, a Dankse Bank subsidiary, has come out with a report on Wealth. It did one before, at the peak of the boom. It made really interesting reading, I thought, though it was excoriated recently in the book on the property boom, Ireland’s House Party, by Derek Brawn, himself of an auctioneers!

Here, the new report asserts that Ireland’s wealth is down by a large €150bn in the past year. The fact is that it was never as high as the earlier figure. The market said it was, but the market got it wrong! Most economists don’t believe that the market can get anything wrong (though they do talk of market corrections… which also implies that maybe they do think that the market is not always right).

The boom was an illusion and we are still falling to ground – to realistic wealth levels. But in the meantime, I look forward to a government report into wealth distribution in Ireland. The Norwegian Minster for Finance, the leader of the Left party, has commissioned such a report. Ireland has a Tax Commission which will report in mid-summer, but under its terms of reference it is instructed not to examine wealth distribution.

I suppose this NIB report is the nearest we will get to such a report until we elect a progressive government. I’m sure many will perturbed to hear that the sale of helicopters has fallen from 66 in 2006 to only 2 (6, but 4 were flogged abroad) and luxury car sales are only one tenth of last year's figure.

Posted in: Economics • Economics • Inequality

Tagged with: wealth • market • economists

Paul Sweeney     @paulsweeneyman

Paul Sweeney is former Chief Economist of the Irish Congress of Trade Unions. He was a President of the Statistical and Social Enquiry Society of Ireland, former member of the Economic Committee of the ETUC, a member of the National Competitiveness Council of Ireland, the National Statistics Board, the ESB, TUAC, (advisor to OECD) and several other bodies. He has written three books on the Irish economy and two on public enterprise, including The Celtic Tiger; Ireland’s Economic Miracle Explained and Selling Out: Privatisation in Ireland, chapters in other books and many articles on economics.