Dear Sarah

Way back in March Sarah Carey wrote an article for the Irish Times for which she has been pilloried on left-leaning websites ever since.

Economist Michael Taft pulled you up on this

‘When asked who should pay tax so that there’s enough money to fund the most generous social welfare payments in the EU, we are back to – you’ve guessed it – the tax exiles.’

But today economist Constantin Gurdgiev argues you were right (sort of – Ireland has the second most generous welfare rates according to Constantin).

Update: Michael strikes back and Constantin claims the differentials are higher than indicated in the OECD reportWhat this shows is that given a pre-held belief and almost any data set it is possible to manipulate the data, perhaps by selectively excluding some data or by performing some chosen calibration on the data, such that the data appears to support your pre-held belief. (Here is a handy selection of cognitive biases to choose from : http://en.wikipedia.org/wiki/List_of_cognitive_biases). This is commonly summed up as Lies, Damned Lies and Statistics.

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Ah, economics – the Dismal Science Art of (Witch)Doktoring Statistics for Political Ends. I mean no offence to the practioners of the aforementioned science art, but anyone who believes that these analyses are crystal clear insights, divining an absolute truth, needs their head examined. Or perhaps just a recap of Scientific Method – which involves postulating hypotheses with the intent of disproving them rather than attempting to prove a belief held in advance by the investigator (as one single instance of disproof, um, disproves a theory while no amount of supporting data can ever prove a hypothesis).

Which is not to say that such analyses are without value, they clearly do add to the debate. They’re just not the absolute truth that readers may assume them to be, and the assumption that they are stymies the debate on the right as much as the left.

  • drumlins rock

    eh?

  • Mack

    Two economists, presenting an analysis about the same thing, come to exactly opposite conclusions.

    I’ve updated it now, hopefully it’s a little clearer.

  • Of course the free state is the second most expensive place to live in the EU.

  • DR

    thanks thats a bit clearer Mack, you should get the jist of a story without using links,

  • Mack

    Garibaldy –

    Ignoring your ‘free state’ reference (I bet you’re popular at parties down here :- ) ). That’s probably true.

    We also have the fastest rate of deflation too

    http://www.turbulenceahead.com/2009/08/yesterday-is-tomorrow.html

    Although services provided by the state are going up in price not down.

  • Driftwood

    Mack

    Has the price of a pint come down any?

  • Mack

    Driftwood –

    Yeah, it seems to have. Bulmers are running ads on bus shelters and the like saying the price of a pint of Bulmers should be less in a pub now (slogan – Think of it as a Windfall). Certainly lots of places in the suburbs are offering cheaper drink, but the ability to reduce price is limited by government intervention (heavy taxation).

  • YelloSmurf

    I’m all for tax and spend, but, while making the super richs’ eyes water imposing heavy taxation on those who won’t feel it is part of it, income tax must be levied as well, not at levels which will cause hardship, but realistically. I beleive that people don’t mind paying (or don’t mind much) if they can see what they are getting for thier money.

  • abu nicola

    I beleive that people don’t mind paying (or don’t mind much) if they can see what they are getting for thier money.

    That’s my belief too, with the added proviso that it must be perceived as “fair”. That generally means “progressive”.

  • Reader

    abu nicola: That’s my belief too, with the added proviso that it must be perceived as “fair”. That generally means “progressive”
    Indeed, there is no known limit to the extent to which people are willing to tax *other* people.

  • Dan Sullivan

    Yet the Republic is so expensive precisely because so many people who have local monopolies pay themselves so much, hence leading to excessive chargers for services.

    Down here the way to fix the economy according to everyone from teachers to doctors from publicans to solicitors is for everyone to lower their prices except them.

  • Mack,

    I’m the very life and soul of every party as you can imagine 😉

    I wonder how much if any of that deflation is coming from the housing market and other large purchases as opposed to normal stuff.

  • Mack

    Gerard O’Neill broke down a little –

    Breakfast Cereals: back to the price levels of December 2005

    Pork: back to November 1989

    Poultry: back to October 1992

    Fruit: back to September 2002

    Potatoes: back to May 1998

    Coffee: back to July 1997

    Clothing and footwear: lowest price levels ever – half the price levels of November 1989 (earliest data for historical data indexed to December 2006)

    Housing, water, electricity, gas etc: back to June 2006

    Private rents: back to November 2000

    Refuse collection: back to July 1995

    Furniture and furnishings: back to June 1994

    Household appliances: back to May 1991

    New and second hand cars: back to July 2002

    Bicycles: back to September 1997

    Information processing equipment (PCs etc): lowest ever – index of 54.8 in July 2009 versus 423.3 (on the same basis) in November 1989Breakfast Cereals: back to the price levels of December 2005

    Pork: back to November 1989

    Poultry: back to October 1992

    Fruit: back to September 2002

    Potatoes: back to May 1998

    Coffee: back to July 1997

    Clothing and footwear: lowest price levels ever – half the price levels of November 1989 (earliest data for historical data indexed to December 2006)
    Housing, water, electricity, gas etc: back to June 2006

    Private rents: back to November 2000

    Refuse collection: back to July 1995

    Furniture and furnishings: back to June 1994

    Household appliances: back to May 1991

    New and second hand cars: back to July 2002

    Bicycles: back to September 1997

    Information processing equipment (PCs etc): lowest ever – index of 54.8 in July 2009 versus 423.3 (on the same basis) in November 1989

    The property collapse, particularly in commercial property could, if handled correctly, lead to significantly reduced costs without having to lower wages. But what’s the betting that won’t happen?