Essential Economics Reading

Lucid commentary on economics is rare. In this time of economic crisis media commentary on economic matters has increased and public interest in such commentary has prompted greater coverage and output. But not always resulting in greater clarity and enlightenment.

One exception to this norm is the Policy Briefing of the Irish CORI Justice team. The current March 2009 issue is a model of clarity, depth and accessibility. Admittedly, the focus is inevitably on the Irish economy but much of what CORI says applies pretty generally to our current situation.

CORI pull no punches when it comes to telling it as it is. The central message is that we need to know why we have got ourselves into this mess and the value system that underpinned what went on, if we are to find coherent answers for the way forward.

The G20 is meeting this week in London. I would hope that some, at least, of the partipants might be paying attention to the CORI message, should it reach them. If anyone reading this blog has that kind of access to G20 personnel they might point their correspondent to the Policy Briefing website for a quick refresher course on what has gone wrong with some (not all) Western economies. But especially those that adhered too fervently to the neo-liberal economic model.

In the case of the Irish economy the CORI analysis essentially argues that Ireland embraced the globalised neo-liberal economic ideology more zealously than most. As one Irish politician famously said, “Ireland is closer to Boston than to Berlin.” That was not meant as a criticism, more an endorsement of the polices that CORI have called into question.

Allegedly, the embrace of the new economic orthodoxy took place in Doheny’s pub off Merrion Square, a watering hole for Government, media and think-tank gurus. It seems plausible. Maybe a return to Doheny’s is in order to put things straight. Except this time I would like to see CORI on a bar stool.

So what did CORI say about Irish economic sins. Irish economic policy in the 1990s was problematic because it followed the neo-liberal economic model that advocated a reduction in taxes while failing to invest adequately in key economic sectors such as education, health and infrastructure. Ireland also developed a tax structure that put money in the consumer’s pocket but, at the same time, introduced a dependence on transaction taxes (stamp duty, capital gains, VAT) linked, inevitably, to a consumer boom and bust economy.

We are now paying the price.

Now click on the CORI link and read the Policy Briefing for yourself.