Glossing over the crisis that dare not speak its name

COMMENT:Economists' attention to non-pressing issues like competition creates a curious impression, writes DAN O'BRIEN

OVER THE past week, economists – mostly from academia and the policy-making community – have been churning out research papers in quantity.

At more than seven separate events in less than seven days, not far off 100 papers and reports have been presented and published. They ranged from big-picture analyses to deep drilling on very specific issues.

There was no let-up over the weekend. On Saturday, left-leaning policy types had a second day of discussion in Dublin at an event organised by the think tank Tasc. A broader church of wonks made for Kenmare to attend the Dublin Economic Workshop’s annual weekend away.

At the Kerry event, the IMF’s Ajai Chopra was the star speaker, addressing the gathering before dinner on Saturday night. There were rumours earlier in the day that he would say something new. He was quick to kill that rumour. Chopra summarised his organisation’s previously expounded views on what Europe needs to do to put the euro on stable foundations.

The fund’s views are radically euro-federalist, as it happens. It advocates much deeper integration on almost everything that relates to preventing Europe’s financiers from ever again causing economic mass destruction.

On this, the fund goes well beyond even what the always-integrationist European Commission proposes. The IMF wants, for instance, the EU to have a single insurance fund – paid for by financial institutions – to repay depositors in the event of a bank going bust. Nobody in Europe is yet seriously considering that.

European monetary union as it exists is a halfway house, Chopra said. He did not say that the halfway house position was unsustainable, although that has long been implicit in the IMF position.

With the anniversary looming of the first arrival of Ajai (everyone felt they could be on first-name terms with the man from Washington), one might have expected Irish economists at their highest profile get-together to ponder one of the biggest happenings in the State’s economic history. Curiously, the bailout featured only peripherally.

Nor was there any evaluation of the Government’s economic policy-making record to date, discussion of European Central Bank policy on multiple issues or consideration of domestic budget choices.

Most amazingly, there was not a single paper on employment and all its attendant issues – welfare reform, the establishment of Solas, the effectiveness (or otherwise) of the Government’s jobs initiative and others besides.

One might think that any profession finding itself the subject of so much attention would use the opportunity to reinforce its influence by making itself as relevant as possible.

And all the more so because Irish economists have long lamented the failure of the political system to use their expertise. They are absolutely right in their criticism of the anti-intellectualism of the political system, but events such as Kenmare raise real questions about the profession’s capacity to be comprehensively and pro-actively policy-relevant.

Almost half the papers given over the weekend were on competition issues, with many speakers looking back on the historical record over 20 years. Another chunk of the weekend was devoted to pensions policy.

Both of these subjects are important, but in the midst of a grave crisis domestically and in Europe, and with a recession looming globally, to devote so much time to them and to exclude many more pressing matters was misjudged.

Public intellectuals have a duty to contribute to the public debate. That duty is greater still for public intellectuals who are paid by taxpayers. The main organisers of the Kenmare event are paid by taxpayers. None is callous or uncaring, but their repeated disinterest in the jobs crisis in particular gives that impression.