From top: David McWilliams; Dan O’Brien, columnist at the Irish Independent
You may recall David McWilliams’ documentary, Ireland’s Great Wealth Divide, on RTÉ One on Monday night.
Dan O’Brien, former Irish Times economics editor, chief economist at the Institute of International and European Affairs and Irish Independent columnist, has taken issue with the source of Mr McWilliams’ data and his following conclusions.
In the Irish Independent, Mr O’Brien writes:
“Early this year the Central Statistics Office and number crunchers at the Central Bank published the first ever set of figures on how wealth is spread in Ireland. These figures provided a treasure trove of new insights into wealth distribution. Monday’s programme never mentioned these figures or even referred to them, despite the fact that they are the only hard data available on wealth equality. Instead, the programme used guestimates made by investment bankers. Those figures were published last year by Credit Suisse, a Swiss bank, in an annual study it does on wealth around the world.”
“…If the more reliable and more up-to-date figures had been used, the story told on Monday night might have been very different. The actual statistics show that the spread of wealth is more equal in Ireland than the average across the Eurozone. That was certainly not the impression the programme gave.”
“…Those who have great power and wealth should be subject to great scrutiny, and should expect to be subject to great scrutiny. That includes, by the by, the main shareholder in the group which owns this newspaper, Denis O’Brien. But David’s assertions about a “reality” of the “working middle classes being excluded” and that it is now more likely for those in the middle to fall to the bottom than rise to the top were opinions presented as facts. In Ireland, we simply don’t have good evidence on social mobility. As such, David’s claims on this issue on Monday cannot be proven or disproven, but there is very good reason to question them.”
FIGHT!
Hard data shows ‘great wealth divide’ is not as big as you think (Irish Independent)
Previously: Good Room Gone Bad
Fair play to Dan O’Brien providing some counter to McWilliam’s claims.
I didn’t see the McWilliams programme (and I don’t generally consider him a serious commentator or analyst) but funnily enough, I was using those CSO figures myself just yesterday. They show that the poorest 20% of the Irish population have negative net worth (their debts are greater than their assets) while the wealthiest 10% own nearly 54% of net wealth. I’m not entirely sure how this compares to other EU figures, but my understanding was that it compares poorly, and is much more like the US spread of wealth inequality. The breakdowns and analysis is here: http://www.nerinstitute.net/blog/2015/05/09/the-wealth-of-nations-is-not-so-even/
On the negative wealth thing, they’re not necessarily poor. For instance, you could have a great job but your mortgage exceeds the value of your home and other assets, so your net wealth is negative. But you’re still living a comfortable life and going on holidays.
that’s not how this calculation of net wealth is done (with the possible/probably exception of mortgaged homes in negative equity). Aside from that exception, the debt of the mortgage is normally more than offset by the asset of the property. So in other words, being halfway through paying a mortgage, however huge, doesn’t put you into negative wealth so long as your house is estimated as being worth more than the remaining mortgage debt. No, I’m afraid the poorest 20% being described in this category are people who are really poor, burdened with debt and not at all living a ‘comfortable’ life. The people those ‘cash for gold’ and ‘consolidate your debt’ ads are aimed at.
wow mcwilliams using numbers to suit his opinion and passing them off as fact. bit like his buy china sell china approach or his i called the irish property market by calling it over valued in 2000 nonsense. he is a master at self promotion and targeting the populist view but a significantly lower class economist.
I agree in the main, but then I wouldn’t take Dan O’Brien at face value either.
and now worryingly a professor at Trinity… God help those about to be ‘educated’ by him!
I thought Mcwilliams point was, income inequality is built into capitalism , and that’s fine, it might be a bit out of whack but that can be worked on, but the deference to the the wealthy is not OK in a republic
that was one of his points. he also had another point that the skew of inequality is very bad in Ireland in relative terms. That seems questionable per Dan O’Brien.
Not to be too pedantic about it, but I don’t recall McWilliams ever comparing the wealth inequality in relative terms to Europe…
So Dan O’Brien doesn’t counter anything McWilliams said –
“The actual statistics show that the spread of wealth is more equal in Ireland than the average across the Eurozone”
That doesn’t dispute the figures McWilliams used.. He’s just saying we’re not as bad as the rest of Europe.
Things are pretty sh*te and they could be worse, is not disproving anything McWilliams said.
Well said Anne.
On my side of the fence things are rosy, very rosy indeed.
How Ireland compares to other EU countries is not the issue here. McWilliams wasn’t presenting a comparison of Eu countries, he was discussing Ireland.
With regards to Dan O’Brien’s article, the CSO figures are 2 year’s old, I think it’s safe to assume that the wealth gao has increased since 2013.
In any event, how can the CSO be trusted after the Eurostat debacle with IW
didn’t see that comment.. +1
The general consensus should be that income inequality in a society as modern and as laden with wealth as Irelands should not exist. We can look at the figures till the cows come home but at the end of the day there are still people on the street when there should not be, there are still those in food poverty, there are still those struggling to bills or finding a job. Only this morning apparently we have no offices for the high tech companies, all of this is getting OTT
Poor facts, all there alone and not being used…
“…Those who have great power and wealth should be subject to great scrutiny, and should expect to be subject to great scrutiny. That includes, by the by, the main shareholder in the group which owns this newspaper, Denis O’Brien.”
The problem with subjecting those who have great power and wealth to great scrutiny is that some (meaning one) of them tend to run to the courts for protection every time their name is whispered.
On an unrelated note I’m looking forward to Dan’s piece on the findings of the Moriarty Tribunal in next week’s Indo.
I never understood the logic in watching these types of programmes. Do armchair plebs really think they will glean any useful or usable information from celebrity economist? Or any economist for that matter? If one is interested in these matters, then programming like this, aimed at the average TV viewer is going to be nothing more than (bad) entertainment and a bad place to start. There’s a thing called internet you know? I once read part of a book , (I can’t remember the name , “Things you didn’t know about and were too afraid to ask” or something along those lines) where the author explained that economists can barely understand or explain what happened years ago, let alone what is going to happen. He also mentioned that back in the old days . kings & emperors would use soothsayers and mages to “predict” future events. Modern politicians use economists.
modern politicians don’t use economists, they use civil servants.
As for inequality in Irish Society, sure Enda the schoolteacher is going to solve that particular problem.
I won’t lie I was hugely disappointed in the program (more fool me for expecting anything better). I already knew about the very general gist of how unequal societies have become and are increasingly becoming.
However he didn’t introduce anything new beyond what a 10min intro could have covered then filled the remaining time with speculating & opinions.
Basically it was pseudo-intellectual poverty and outrage porn, no more enlightening than C4’s benefit street. He made no effort to compare Ireland to other countries like say Scandinavia who have a lower CEO wage to lowest paid employee ration (a very illuminating figure)
The audience is not an academic. The audience is Joe on the street.
Was McWilliams supposed to do everything in an hour? It was a good show, nothing new, but it has been good at getting people talking and it has raised concerns.
And if you paid attention to the ‘Think, Ideal, Actual’ then you would know that people most certainly were not wholly aware of the situation of the wealth divide in Ireland.
I’d love to see a part 2 that compared Ireland to the world; and maybe one that addresses the new figures O’Brien’s on about versus those that were used in the programme.
Dan doesn’t refute those “‘Think, Ideal, Actual’ figures in any way..
He says the CSO figures weren’t mentioned all right.. and makes the claim based on that, that –
“f the more reliable and more up-to-date figures had been used, the story told on Monday night might have been very different. The actual statistics show that the spread of wealth is more equal in Ireland than the average across the Eurozone”
I don’t see how the story would have been very different. He doesn’t discuss the figures at all.
Saying the spread of wealth is more equal in Ireland than Europe, doesn’t refute those Actual figures on distribution of wealth that McWilliams used. McWilliams didn’t do a European wide comparison.
Sounds like a lot of opinion and fluff coming from Dan, not McWilliams.
O’Brien is a typical pro Euro pro business economist,he was even too right wing for the Irish Times and is working for his true hero now and no doubt aspires to the same non dom off shore life that his boss does,wonder does he have a kitchen in his gaffe.
But the sun always shines in Malta
Bit ironic considering McWilliams used to work for the Central Bank. Though it was hilarious that some commenter suggested the CSO can’t be trusted because of Irish Water. These are professional government statisticians bounded legally and through Eurostat guidelines. I don’t think there is any profession I’d trust more not to deliberately mislead people. What people do with their statistics is a different matter altogether.
So the CSO spent 2 years working on the IW submission to eurostat, and eurostat determined that CSO was factually incorrect.
So, if CSO can’t get this correct, and lets be honest there’s nothing complicated about IW set up and funding model, how can they be trusted?
No, Eurostat judged that the proposal to keep IW debts off the State’s B/S didn’t comply with their accounting rules. So that was an opinion, not a fact.
Eh …. it’s always easier to fail than to succeed. David McWilliams makes money by bemoaning everything about Ireland. It’s his job so you shouldn’t be surprised if he is misleading in order to justify his ejaculations.
All i know is a huge chunk of middle class wealth got transferred to somewhere else in the last 10 years. I doubt the poor got it, particularly because they are still poor.
Before i saw his picture, just as i read the headline, i knew it was O’Brien and i knew it was the Independent.
Basically he is saying look at these numbers, that are older, McWilliam’s is wrong – it’s bullpoo.
The real reason that McWilliam’s is wrong is that it’s not some inferiority complex the irish have. This is government policy. Push wealth to the top and get the backhanders to get in again and continue to push wealth to the top. It will continue under the likes of Fianna Fail/Fine Gael, Renua and Labour.
they are both wrong.
Dan O’Brien is playing with words and not giving actual figures to back up his argument which fits a person who supports TTIP and who works for the Indo. The recent CSO figures show that the top 10% have 53% of the wealth while the bottom 20% owe more than they own. they dont say what the next 10% own but i am sure it all comes close to the 73% McWilliams quotes. i did recently hear him supporting the Nordic economic model which surprised me but apart from that he is definitely a defender and benefactor of the status quo.
As for David McWilliams his show did highlight the terrible inequality that the neo liberal free market has created and its good that he has opened up a discussion on the subject. his point of view is nothing new and only appears radical in a conservative country like Ireland where right wing ideology reigns supreme in all areas of our society. Thomas Piketty is a far better communicator on this subject and offers real possible solutions like wealth taxes not the vague ones McWilliams offers.
What really annoyed me about the show was McWilliams calling Russia and Cuba socialists countries. They were and are communist countries and he knows this, the Nordic countries are socialist and offer a real balance between unfettered capitalism and communism. the top 20% in Sweden have 36% of the wealth, if McWilliams figures are correct they have 73% here and in the US they have over 85% of the wealth. Transparent and fair tax systems like they have in the Nordic countries combined with wealth taxes that even the OECD are calling for are what we need here and i think this was the missing link the show did not give people. i think this is because McWilliams is right wing even though he claims to be a man of the people, he is just not as right wing as the neo liberals but is not far off either.
the middle classes are afraid of the rising power of socialism and the fact the SInn Fein are the main socialist party really frightens them so any mention of socialism is almost always thrown in with communism to distract the uneducated