TASC Annual Lecture discussion

Slí Eile: The Annual TASC Lecture given by James Galbraith and Maria Rodigrues attracted limited media attention (see Irish Times coverage). You can find an interview with Galbraith at Irish Left Review as well as a lot on TV3's Nightly News with Vincent Browne. Both Galbraith and Rodrigues pointed to the need for:

- An ambitious, internationally co-ordinated and effective stimulus package; and
- Deep reform of institutions and the regulatory framework within which corporations – especially financial – work.

The key messages are not to be missed – even in Ireland….however the event went without comment on irisheconomy.ie.

Lets suppose some household name Irish economist were to respond to the lecture last Thursday evening what would he (they are almost entirely he) say? Something on the following lines:

Thank you for a very interesting lecture Professor Galbraith and Rodigrues. But, you know, what you propose might be all very well in the US or some European countries …. It just doesn’t apply here. For one thing we are so deeply in trouble financially, fiscally and otherwise that we need to get public finances, competitiveness and banking sorted out BEFORE we can entertain notions of expansion in public spending. Secondly, a domestic, home-grown stimulus package probably would not work so well here anyway because we are a small open economy with high import content in most forms of public spending and, therefore, low Keynesian multipliers…..

Or words to that effect….

The point needs to be seriously debated and we have hardly begun. I suggest that we are confronted by two salient facts whether we like it or not:

1. An overwhelming Irish media, professional economics, political consensus that stimulus packages will not work here, at this time…
2. A lack of a coherent, well-thought out, empirically-backed, convincing alternative package of proposals to counter the orthodoxy consensus.

This, I suggest, is a crisis of political economy. Speaking of the political, some Government commentators who suggest (correctly) that the ESRI – an independent economic think-tank – is broadly behind the Government’s approach to economic policy is correct. If anything, it could be said that Government is too timid and not deflationary enough in the view of some economists (although more outside than inside the ESRI on this one).

So, we have deflationary politics, deflationary economics, ecologically disastrous patterns of behaviour and supporting ‘all growth is good’ ideology and no comprehensive, elaborated economic plan from the left. Is it any wonder that we are not seeing a seismic shift to the left fast enough to match the seriousness of the current economic crisis. If anything we are seeing a very worrying movement in the opposition direction in many EU States. In part that reflects the failure of many progressive forces including allied intellectual forces to embrace a more urgent, joined-up and well-thought out response to the current gathering storm.
Please, please can we have more thought, more debate and more action.

Posted in: Economics • Fiscal policy

Tagged with: stimulus • recovery