Towards a New Economic Narrative

One could read Michael Taft‘s articles for style alone, if the content were not of such import. His “The Recession Diaries” published (at least) daily on his blog and also on Irish Left Review makes for fascinating reading. The insights succinct, the criticisms sharp.

For style, consider this: “Let’s be under no illusion. The right is driving this debate. And the main ‘opposition’ in all this has been Fine Gael who wants more of the same. A debate? You need two sides to have a debate. All we have is the sound of one hand slapping us about.”

For content, consider this: “So far, the Left, with some exceptions, has staked out a small ground. It opposes cutbacks, proposes infrastructural projects and more training places, and suggests alternative revenue streams such as cutting tax reliefs. Some good ideas but, to date, they do not cohere into a programme of expansion and renewal. They do not, as yet, constitute a new narrative.”

He wrote an article recently for Irish Left Review entitled “Towards a New Economic Narrative”, from which the above two quotes come, which, one fears, will not be listened to by those who should listen, acted upon by those who have the power, nor given the coverage it deserves by those who are in a position to do so. This article is an attempt to counter this fear.

In “Towards a New Economic Narrative” Mr Taft lays out ten proposals which could help to regenerate the Irish economy, ranging from “expanding fiscally”, to “expanding demand”, to “a new enterprise pact”.

The ten points proposed are as follows, with a brief excerpt from each.

Expand Fiscally

1) Borrow ‘Til We Drop
“We need to borrow. We need to borrow big time. You can’t cut-and-tax your way out of a recession – you spend. And borrowing is the main instrument. Borrowing will get us ‘over the hump’. We won’t take money out, we will put money in. In times of recession, borrowing is good.”

2) Tax Lay-About Capital, Not Work
“Just to ensure that we don’t get caught in a debt-spiral, buttress our borrowing with new tax measures – but only on capital and higher incomes. It’s okay to tax these folk – they have higher liquidity which doesn’t end up getting spent or invested productively.”

3) Public Safety Committees
“Inefficient and inequitable expenditure remains out of inertia – or because it benefits a vested interest. Roll out the guillotine.”

Expand Demand

4) Spread it Around
“In 2007, 500 companies made over €26 billion in profits while 90 percent of the top 1000 companies were in profit. Even if the recession reduces this, there’s still a lot of money there to spread around. So renegotiate the wage deal (it’s been done on two previous occasions so there can be no objection from precedent); or bring forward the next wage deal. Whatever we do, make sure that social partnership remains relevant to the times.”

5) Competition This!
“Take up Colm Rapple’s excellent idea to require retailers to provide real-time price information to a revamped National Consumer Agency which would put up the information on an interactive, regionally based website. The Tanaiste said people should shop around – well, let them shop around on the website; and shame the price gougers.”

6) Go on a (Social) Binge
“While the last thing we need is to artificially inflate the construction sector to previously unsustainable levels – the last thing we need is to throw building workers on to the dole queue or let valuable skills leave the country, especially with all the social and environmental work that needs to be done. […] The biggest drag on demand and the biggest drain on the Government’s budget is unemployment so these measures give us room to manoeuvre, a breathing space – and ensure that people have a warm place to live in and children aren’t taught under leaky roofs.”

A New Enterprise Pact

7) A New Green Deal
“We can muck about with ‘market signals’, ‘tax incentives’ and, of course, the old reliable – pleading with foreign capital to nod in our direction; or we can just do it ourselves.[…] Going green means stepping up, not cutting back, our expansionary programme.”

8) Money’s Too Tight to Mention

We will need to prise open new credit streams. Beating banks about the head will only get so far (no matter how much fun it is). Expansionist policies need expanded credit to turn it into sales, exports, jobs and profits.

9) The Enterprise Guarantee

“We need a deep-rooted, democratic partnership of all stakeholders working throughout all layers of the economy. We need a new enterprise guarantee – as wide-ranging as any undertaking given to banks. Specifically, sector-wide strategies should be created, pursued and monitored through these new structures with the participation of employers, trade unions, the state and other stakeholders. […] This is the New Enterprise Pact, the high-road to jobs, profits and wealth; this is the new face of Irish enterprise. This, and not the slash n’ burn model, will set the ground for sustainable growth in the future. Make no mistake: creating a new generation of indigenous, progressive companies – which will take time – is one of the most urgent items on the economic agenda.”

10) Reinventing Public Economic Activity
“The Left should argue for a truly pluralist ‘mixed market economy’. Already, we have ‘private sector’ companies who are reliant on the public sector (through PPPS, procurement, grant-aiding, tax relief, etc.). Now we must create new models where the private and the public can develop to their maximum potential and mutual benefit. […]  There’s a name for this: mixed-market economy. The Left should argue for participatory pluralism, not a corporatist/statist one-size-fits-all.”

Read the full text of “Towards a New Economic Narrative”.

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