The economics of ‘hard choices’
Sir, – Stephen Collins surely goes too far in efforts to reshape history so as to suit a particular narrative (“False sense of security prevails on Covid-19 cost”, Opinion & Analysis, May 15th). This is clearly seen in his attribution of the cause of the 2008 crash.
He states that in the summer of 2008, “employers and the unions, with the encouragement of the government, agreed a generous public service wage deal – the outcome of that was record unemployment, a massive debt and the EU/IMF bailout”.
Most now accept that the fiscal collapse referred to was caused by the inadequate risk-management practices of the banks and the failure of the regulator to supervise these practices effectively. This was amplified by an international financial sub-prime crisis and the neoliberal, pro-cyclical fiscal policy pursued by the then-government of reducing taxes during the period of economic expansion.
If one listens carefully to comments being made by politicians currently engaged in negotiations to form a government, the same language that was in vogue in 2009 can be heard more and more.
Hardly a single sentence passes now without that dreaded term “hard choices” being employed which, experience teaches us, is used when those with the least are being forced to contribute more.
There also seems a widespread capacity now to ignore the dire consequences that materialised as a result of that “hard choices” policy: a sharp rise in poverty, particularly among children; the homelessness crisis; and the great difficulty experienced by many accessing basic utilities and services, chief among them healthcare. Is it really being suggested that we repeat that all over again?
Whatever the final cost of the pandemic turns out to be, the solution to dealing with it must be grounded on a simple principle that the State will ensure that whatever wealth there is will be divided with the highest possible degree of distributive justice.
To achieve that, all vital utilities and services must be provided under the direct oversight of the State.
It may well be no exaggeration to suggest that a failure on the part of our political leaders to remember the recent past, and act accordingly, would prove an even greater threat to our society than any coronavirus. – Yours, etc,
Sir, – I have heard it said that the Government is paying us to stay at home. Let’s be clear. If you are receiving the temporary unemployment benefit, then you are paying yourself to stay at home. If you are receiving the wage subsidy, then you are paying yourself to work. The only reason this doesn’t seem immediately apparent is because we haven’t been presented with the bill yet. – Yours, etc,