The recently-departed ESRI (The Economic and Social Research Institute)
hipster economist Richard Tol writes:
Among our reasons to leave are the economic prospects of Ireland, and particularly of families like ours with a triple exposure to public finances: two salaries and kids in education. I called that “10 more years of austerity”, where “10 years” really stands for “a long period”. This was apparently news to some. Although really not my area, the facts are simple. The programme for government and the deal with the Troika have that the primary deficit will be reduced to zero by 2014-5. Public debt will reach 125-135% of GDP by then, pension reserves will be depleted, and valuable state assets will have been sold. That means that, after 2015, a large share of tax revenue will go towards interest payments, debt reduction, and rebuilding of reserves – rather than to things that make life worthwhile. If debt is to be reduced to 60% GDP, then 10 more years of austerity seems fairly optimistic. I do expect, however, that the ECB will monetize part of the debt.
I also said a number of things about the ESRI. I enjoyed working there, and hope to pass to my students the things I’ve learned while there. However, I also think the ESRI should work harder on transparency and quality management. ESRI data and models should be in the public domain.
There has been no independent investigation of the accusations of racism against some ESRI staff. Indeed, ESRI management has repeatedly denied the possibility that there could be any truth in such allegations.
The ESRI is not as independent as it should be. The ESRI does not have a budget to pursue issues that no one in government wants to hear about.
Tol Goes Bye Bye (Irish Economy)
Alan Barratt (above), an economist formerly with the ESRI was on Marian Finucane yesterday on RTE R1 and spoke of his experiences at the state-run think tank.
Barrett: “My own most recent example say of ruffling feathers is..I think it was the second last commentary that I wrote which was in the latter part of 2009. Anyway, the years start to blend. But I remember, that was a particularly sensitive time because it was close to the bailout happening. And we had a line in the commentary report, more than a line, we had an argument that we were worried that the austerity programme was too regressive and maybe thoughts should be given to extending it somewhat.
“Now ..the Department of Finance did call the Director of the ESRI to say they were uncomfortable about this. The director and the Secretary General of the Department of Finance had a conversation. The Director of the ESRI called me in to say ‘Look we’ve had this conversation’. She asked me was I convinced that I could stand over what I was saying. I said ‘yes’. She said ‘fine’. That was the end of the story and I have to say I walked out of the office that day thinking ‘This is a pretty good place to work’. OK? Because in spite of the fact that it was a very, very tense situation. I was being told that ‘As long as you can stand over what you’re saying, that’s OK’.”
So, the then head of the Department of Finance, David Doyle (Kevin Cardiff’s predecessor), picks a bone with the ESRI for it being critical of the Govt/Dept of Finance’s outlook on austerity measures.
Could this be the same David Doyle (above) who blindly signed off on Michael Fingleton’s loan book at Irish Nationwide? From Matt Cooper’s How Ireland Really Went Bust: