Sunday 22 April 2018

Tough audience warms to politico's bright ideas

IT was the Leo Varadkar show in the end. The economists, analysts and officials who gather for the annual Dublin Economics Workshop in Kenmare are not easy to impress as an audience.

It is even harder to get them to agree on anything, but there was general agreement that the Fine Gael energy spokesman had done the business.

They like his ideas on letting spending take the brunt of the budget adjustments. They warmed to his thoughts on changing the electoral system. But mostly they were pleasantly surprised by his confidence and grasp of the issues.

"He should stay out of the TV studios," one veteran muttered. "He doesn't do himself justice there."

Mr Varadkar was speaking because a family bereavement meant Finance Minister Brian Lenihan could not attend. Journalists were hoping he might tangle with the Doom School of economists who have given him so much grief over the past two years.

But everyone else seemed a bit tired of argument and, unlike last year, there was general agreement on the costs of the bank rescue.

There was a cut -- albeit a polite one -- from NUI Galway economist John McHale at RTE's 'Prime Time' programme for saying the bank rescue cost would be €80bn.

Prof McHale said that is double counting. Most papers used a figure of €50bn for the working total. So that's all right then.

It was used in a paper from NUI Maynooth and DCU economists Gregory Connor and Brian O'Kelly, which claimed we are no worse off than if there had been no bubble and burst.

We are a lot more unhappy, what with all the unemployment, big mortgages and government debt. But GDP -- the production of goods and services -- is much the same as it would have been had we not made all those mistakes.

It just got there a different way -- soaring to ridiculous heights and then crashing to earth. But the implication behind it is rather worrying.

As Prof Connor put it, growth from 2003-10 would have been "anaemic" had the banks been prevented -- as they should have been -- from borrowing all that money abroad. The era of rapid Irish growth was over, but no one noticed. It is still over, and it is time we did notice and began to plan accordingly.

Niamh Brennan, of the Quinn School of Business in UCD and chair of the Dublin Docklands Development Authority, was her usual forthright self. She denounced those who use the law to transfer their impaired assets to family members, leaving "ordinary, decent people" to pick up the tab.

Irish Independent

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