Cliff Taylor: Mr President, is economic recovery not a good thing?

It was more reality than ideology that drove need to cut spending and increase taxes

It was pretty clear which type of speech President Michael D Higgins enjoyed delivering on his recent US trip. Photos and video clips show the trademark Higgins passion when he went on the offensive, for example, railing against the “stealth power” of multinationals in an address in Seattle.

Dig a bit deeper through recent presidential appearances and a wider point becomes clear. The President is not comfortable saying anything positive about the Irish economic recovery.

On a visit to the Council of Europe this year he repeated a number of times that Ireland should not be seen as an “exemplar” of how to get through an economic crisis despite our recent strong growth. Asked by a journalist what was the “secret of Ireland’s success”, he took issue with the question, saying that the economy was not a driverless car and there had been much suffering caused by the “narrow fiscal orthodoxy” imposed during the crisis.

Later, in September, the President said he “recoiled” when he saw headlines talking of a resurgent economy, arguing that inequalities were “roaring much louder”, as shown, for example, by the housing crisis.


The President is a long-time critic of the market-based economic model. Fair enough. And there is depth in the way he addresses many big issues. For example, one of his speeches in the US focused on sustainable economic development and the link between consumption in the West and climate-linked poverty in parts of the developed world.

The question of inequality, another theme regularly addressed by Higgins, is a global issue. It is fuelled by headlines such as this week’s revelation that the new boss of Barclays Bank in the UK was to be paid the ludicrous sum of over £8 million a year and the contrast with static or slow pay growth for many lower down the food chain.


But the President’s reaction to headlines about Irish economic recovery are symptomatic of something else – a view that the recovery is to be suspected rather than welcomed.

It follows on from the argument that the so-called austerity policies followed during the crisis were a disaster. The economic crash bolstered the argument of those who criticise the market-based economic model and the policy characterised as austerity. But if you are in the anti-austerity camp then the fact that the Irish economy is now growing strongly is an inconvenient truth.

The pity, really, is that this argument splits into the two pro- and anti-austerity extremes, with little enough by way of measured discussion.

The anti-austerity brigade seems to assume there was some way for Ireland to magically escape cutbacks when a huge gap had emerged between annual spending and revenue even before the bank bailout costs. It was more reality than ideology that drove the need to cut spending and increase taxes.

Huge mistakes

Of course, there is a debate to be had about how the whole thing was managed. At a European level it is clear that huge mistakes were made, for example by the ECB in not acting quickly enough to cut interest rates and print money.

The lack of any budget stimulus from richer countries who could afford this, to help counteract cuts in the periphery, was another big mistake.

Had Europe done better , and had the bank costs not also been lumped on us, then Ireland would have done better. But climbing out of the hole was never going to be easy or painless.

And then there is the recovery. Surely it is positive that the economy is recovering, and that this growth is providing jobs and starting to rebuild living standards?

Yes, there are huge problems that remain and big issues about how the economy, society and public services are rebuilt. But if you accept that the goal of policy is to improve living standards for as many as possible, then the recovery contributes directly via rising employment and wages and indirectly by giving the Government more money to spend.

Maybe the President can’t bring himself to rejoice. There are, it is true, a few odd and uncomfortable echoes of the Celtic Tiger years around. But are the rebound headlines really a cause to “recoil”?

Surely more resources are the basis on which any economic and social improvement will happen – and growth of 5 per cent plus opens up the argument of where we should spend money rather than where we should cut.

No doubt the multinationals, another target for the President, will be among the beneficiaries of recovery. But as I discussed the Apple tax row with someone recently, he remarked that he was just then near Hollyhill, where that company employs more than 4,000 people. Real people, doing real jobs. As with the economy overall, it is surely possible to question aspects of the way these companies behave and are organised – or some of them, anyway – while still accepting their massive contribution to our economy.

Whether or not the Army was on stand-by to guard the ATM machines in 2011 and 2012, let’s not forget how scary those times were and how painful they were for many families.

The recovery is now broadly based and is benefiting many households. There is a lot to do and a lot of damage left in the wake of the crisis. But headlines about the recovery should surely elicit some relief.