Exposing economic literacy as orthodoxy

I suspect that the tenor of the debate around the economy is going to take an ugly turn with the entry of various independents into the electoral race over the next week or two.

Prior to the dissolution of the Dáil, there was the grotesque spectacle of Fine Gael and Labour facilitating the passage of a Finance Bill that they publicly stated they would vote against, but, by their actions clearly condoned. Collectively, their positions on the economy, or specifically, the transfer of private bank debts onto the state pretty much share the same space with the outgoing coalition. Despite some Fine Gael posturing in Brussels with their European People’s Party colleague José Manuel Barroso, his response to Joe Higgins over the IMF-EU deal suggests it was little more than an exercise in electoral optics that will bear no fruit. Where public debate has occurred, acceptance of the collective position of Fianna Fáil, Fine Gael and Labour is being presented as the norm, whereas dissenting voices such as Sinn Féin and ULA candidates are being dismissed as economic illiterates.

Ironically, the severe terms of the ‘bailout’ have been widely critiqued by experts on international finance such as Gerarld Celente, Marc Faber, Max Keiser, Jim Rogers, Peter Schiff and George Soros, and many figures on the political left and right. Many of these voices suggest, in the current arrangement, that the Republic of Ireland will end up defaulting on the debts incurred by private banks with German, French and British lenders. Even the political right understand that banks that fail should be allowed to fail, never mind unnecessarily crucifying the public with their debts. The truth is, being unable to close the gap in income and expenditure due to the interest and repayments on the bailout loans, the Republic will be selling off as many public assets as possible into private hands, but will be unable to sufficiently reduce the debts carried by the taxpayer and a default will occur regardless.

As the likes of Shane Ross and Paul Sommerville enter the political arena, it looks like the current economic ‘literacy’ may well be exposed as mere orthodoxy. Ross and Sommerville are both effective performers and are likely to benefit from sympathetic handling by the media, as did George Lee. The volume at which Ross and others enter the election debates will have a greater impact that in the constituencies in which they stand as they have been consistent in their disregard for the prevailing orthodoxy over economic strategy.

This orthodox opinion, the one presented as economic literacy by Fianna Fáil, Fine Gael, Labour and, to some extent, the Greens, is horribly exposed once you go beyond the confines of the same Irish media that refused to report the truth about the likes of IMF-EU deal. Outside of these four parties and their allies in the EU, like Barroso, no-one gives their economic policies any remote credibility.