Dept of Finance warned government of dangerous policies

[liaconn]

It might be overstating it to say that the DoF comprises people with no economic background. There are people there with qualifications in economics, although I don't know how many. In addition, many of the generalists are quite bright people who might not have formal credentials in economics, but have the intellectual capacity and the motivation to become well-versed in economics.

I would agree with that. A lot of 'economics' is really just a practical grasp of what's going on domestically and globally, allied with the intelligence to analyse it and come up with good advice.

I heard, from the horses mouth, a couple of years ago that officials in the Dept had been warning Govt for ages of the dangers of their economic policies and were being brushed aside. I am very glad those civil servants have been vindicated. They had effectively been slandered by short sighted, greedy, power hungry FFers.

 

[csirl]

It might be overstating it to say that the DoF comprises people with no economic background. There are people there with qualifications in economics, although I don't know how many. In addition, many of the generalists are quite bright people who might not have formal credentials in economics, but have the intellectual capacity and the motivation to become well-versed in economics.

Maybe this is the secret of success - hire bright people with intellectual capacity who have not been infected with the type of group think you seem to have with the professional economists who all think the same because they have been trained in the same manner.

 

[Shawady]

...The dogma that no one told them, is looking a bit thin now...

+1.
It also puts a big hole in the arguement that the opposition were also screaming for more spending. In fairness to FG/Lab, they hadn't got access to the advice from DoF and if they were in government may not have over ruled them.

 

[Shawady]

I never said the civil servants weren't doing their jobs. The report specifically said that the budgety process was overwhelmed by social partnership and government programmes to increase spending and cut taxes. Blaming big bad developers is nice and populist but the construction industry werent the ones calling for huge increases in things like social welfare. The construction industry was part of social partnership as was IBEC and these bodies are just as guilty as politicians and trade unions for short sighted leadership.

I agree with a lot of that this but when people talk about social partnership they rarely think about groups like CORI or St Vincent De Paul.
I haven't read the report yet but would be interested in what is says about the period 2004-2008. The increase in the social welfare budget in this period was astronomical and is a major factor in our deficit at the moment, even more so than the public sector pay bill.

 

[Chris]

It might be overstating it to say that the DoF comprises people with no economic background. There are people there with qualifications in economics, although I don't know how many. In addition, many of the generalists are quite bright people who might not have formal credentials in economics, but have the intellectual capacity and the motivation to become well-versed in economics.

Hi Pdraigb, what I didn't mean to say was that you have to have an economic education background in order to be a credible economist; quite the opposite actually, so appologies if I wasn't clear about that. I think that the less formal mainstream Keynesian education has polluted a person head, the better. The less a person is motivated by winning government contracts, the less that person will say what governments want to hear. And it is precisely these economists, i.e. those that expose problems with government policies, that should be listened to most. Instead what generally happens, and has been now exposed through recent report, is that governments pay for "economic consultants" to tell them what they want to hear, which is that they can steer the economy by pushing buttons, pulling levers and pressing pedals, while ignoring and ridiculing those that oppose them.

Hi Chris, Do you have any links to this? I'd be interested in learning more.. Thanks, F.

The two most outspoken Austrian Economists before and during the current crisis were Marc Faber and Peter Schiff; there are some very good youtube videos from the pre-crisis years.
Some with less media coverage were Mark Thornton and Frank Shostak:
http://mises.org/daily/1177
http://mises.org/journals/scholar/Thornton13.pdf

You could also look up some writings of FA Hayek and Ludwig von Mises during the 1920s which predicted the Great Depression from an Austrian point of view. Some of Mises' essays have been made available as a free PDF book: http://mises.org/books/causes.pdf
However, I would suggest looking at this after becoming more familiar with the general ideas of Austrian economics and the Austrian Business Cycle Theory. Here are some basic introductions:
http://www.youtube.com/watch?v=wCmwRN5gjOo
http://mises.org/daily/672

It's all extremely fascinating to see how the same mistaken policies made during the 1920s and 1930s are now being made on almost a global level.

 

[liaconn]

This report has apparently been sitting on Brian Lenihan's desk for weeks. How on earth can he get away with keeping it from public knowledge until after he has been safely re elected? I think he should resign.

 

[Complainer]

This report has apparently been sitting on Brian Lenihan's desk for weeks. How on earth can he get away with keeping it from public knowledge until after he has been safely re elected? I think he should resign.

Indeed - this is a huge issue.

 

[Shawady]

This report has apparently been sitting on Brian Lenihan's desk for weeks. How on earth can he get away with keeping it from public knowledge until after he has been safely re elected? I think he should resign.

I think there will be more of this type of thing to come. When you think of all the areas where money was wasted in the Bertie years, it would be interesting to see what the government was advised.
The new coalition might spill the beans on them.

 

[Sunny]

The report wasn't critical of Brian Lenihan. No skin off his nose if it was critical about the department over the past 10 years. He has only been in there for a couple of them and by then it was too late.

 

[Complainer]

The report wasn't critical of Brian Lenihan. No skin off his nose if it was critical about the department over the past 10 years. He has only been in there for a couple of them and by then it was too late.

Technically true - but I'd bet a fiver that he wouldn't have held his seat if this had come out before the election.

 

[liaconn]

The report wasn't critical of Brian Lenihan. No skin off his nose if it was critical about the department over the past 10 years. He has only been in there for a couple of them and by then it was too late.

No, but it was very critical of his party (not the Department) which would have affected votes for FF.

 

[Firefly]

Thanks Chris,

I've watched a few of the Marc Faber clips on Utube alright and they're very interesting. Will check out the others, thanks.

Firefly.

 

[Bronte]

This report by a civil servant on civil servants was based on what exactly? On all or selective documents made available to that civil servant by the civil servants whose advise is being checked. Wonder how much went into the shredders.

Would those civil servants hell bent on managing finances correctly be the same ones who managed to overturn the cuts to their own salaries recently?

 

[Complainer]

This report by a civil servant on civil servants was based on what exactly? On all or selective documents made available to that civil servant by the civil servants whose advise is being checked. Wonder how much went into the shredders.

This is a scurrilous allegation, made on absolutely no evidence whatsoever. The authors are two international former heads of Dept Finance in their own countries, and one Irish former Sec Gen, not of Finance. They are smart people, and even in anyone tried to pull the wool over their eyes, they would have seen it. You should really withdraw this allegation.

 

[liaconn]

This report by a civil servant on civil servants was based on what exactly? On all or selective documents made available to that civil servant by the civil servants whose advise is being checked. Wonder how much went into the shredders.

Would those civil servants hell bent on managing finances correctly be the same ones who managed to overturn the cuts to their own salaries recently?

It was not a report by Irish civil servants as you seem to so ignorantly assume. Also, civil servants are suffering from this recession too you know, in fact a lot more than some people are. Why would they cover up for Dept of Finance officials if they had created the problem. If you're going to make a post like that contemptible one above, at least get your facts right.

Your post clearly indicates that you are just determined to bash (not to mention slander) civil servants no matter what the situation. Hardly gives you much credibility.

 

[Bronte]

I will not withdraw my observation. I know it was not an Irish civil servant. I'm just making an observation which I'm perfectly entitled to do.

A report is only as good as what's provided to the person making the report.

If the report is true than no less than 3 Ministers deliberately set about bankrupting Ireland. And if that is true, why had none of the bright and intelligent civil servants during that time put that information in the public domain. They surly owe more of an allegiance to the Irish state and thereby it's people than to politicians whims.

 

[liaconn]

It was not an 'observation', it was a nasty little statement with no basis whatsoever. You are deliberately implying that civil servants witheld files and documents from the investigators. Are you also saying that the investigators made up the statement that civil servants had warned the Govt repeatedly about the dangers of their policies? How would withholding documents facilitate that??

 

[Berni]

why had none of the bright and intelligent civil servants during that time put that information in the public domain.

Because they have signed the Official Secrets Act, and probably didn't fancy 6 months in Mountjoy

 

[Bronte]

It was not an 'observation', it was a nasty little statement with no basis whatsoever. You are deliberately implying that civil servants witheld files and documents from the investigators. Are you also saying that the investigators made up the statement that civil servants had warned the Govt repeatedly about the dangers of their policies? How would withholding documents facilitate that??

I am not saying that the conclusions are incorrect, and so far I've only heard what the media has chosen to highlight.

My point is that after the fact it's easier to change the emphasis on certain things. I don't know if the Minister for Finance was told for example here is 10 ways to go ranked in order of danger to the economy. Or was the Minister given one document that says don't do this because it will damage the economy and then the Minister ignored that advice.

It wouldn't be beyond the realms of possibility that as civil servants are in the hot seat now to justify what they did advise at the time that they show only that which they want to show. But you all seem to think it's a fantastic report that vindicates the civil servants and that's it end of story.

To the post about the official secrets act. Surely one of those top intelligent guys in the civil service would have found a way to get out the information that the government was ruining the economy. A person loyal to their country could have released the documents and resigned etc. Or leaked the documents to a newspaper.

 

[liaconn]

I am not saying that the conclusions are incorrect, and so far I've only heard what the media has chosen to highlight.

My point is that after the fact it's easier to change the emphasis on certain things. I don't know if the Minister for Finance was told for example here is 10 ways to go ranked in order of danger to the economy. Or was the Minister given one document that says don't do this because it will damage the economy and then the Minister ignored that advice.

It wouldn't be beyond the realms of possibility that as civil servants are in the hot seat now to justify what they did advise at the time that they show only that which they want to show. But you all seem to think it's a fantastic report that vindicates the civil servants and that's it end of story.

To the post about the official secrets act. Surely one of those top intelligent guys in the civil service would have found a way to get out the information that the government was ruining the economy. A person loyal to their country could have released the documents and resigned etc. Or leaked the documents to a newspaper.

I presume if a report came out 'vindicating' some of the negative stuff that's said about civil servants you would be equally sceptical? I think not. By your logic, absolutely no report could be unbiased and honest.