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News : Irish Economy Last Updated: May 8, 2014 - 10:01 AM


Irish Media Post-Economic Crash: "Don't interrupt the minister"
By Michael Hennigan, Finfacts founder and editor
May 6, 2014 - 6:32 AM

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Richard Bruton (l), enterprise minister, and chief spinmeister of the Government. Jobs announcements are a key political publicity tool and a loss of jobs only merits a ministerial statement if it is large or in a minister's constituency.  

Irish Media Post-Economic Crash:  "Don't interrupt the minister," the official press handler for Richard Bruton, enterprise minister, interjected at a press conference in Dublin last month as the minister rejected a suggestion that in respect of the claimed 61,000 jobs that were added in the economy in 2013, that there were question marks on the rise in 27,000 farming jobs (+30%) and the return of self-employment without employees to boom-time levels.

The press conference highlighted 1) the enduring addiction to political spin at ministerial level 2) the pervasive use of distorted data without qualification 3) the timid response of the mainstream Irish media to these issues, in particular in a system where most members of the Oireachtas (parliament) are disengaged from the policy making process, because of parliamentary rules and multi-seat constituencies, which fosters clientism.  

Two weeks before Bruton's press conference, Prof John FitzGerald of the ESRI (Economic and Social Research Institute), had said:

This is the first time in sixty years that reliable sectoral employment figures are not available and, unfortunately, this is happening just when we are experiencing major problems with a range of other data. This makes it particularly urgent that the CSO (Central Statistics Office) produces consistent sectoral employment data for the last decade, taking account of the rebasing that it has recently undertaken."

Who to believe?: Bruton, brother of a former taoiseach (prime minister) or FitzGerald, son of a former taoiseach.

I was back in Dublin from Kuala Lumpur at the press conference attended by Yves Leterme, deputy secretary general of the Organisation for Economic Co-operation and Development (OECD) and former Belgian prime minister.

Richard Bruton had commissioned the OECD to do a special review of his Action Plan for Jobs (APJ) programme - - why spend taxpayer funds just months after the OECD had covered employment issues in its Economic Survey of Ireland report in September 2013? -- and in its April 2014 study of the APJ, there was a passing mention of a key recommendation that the think-tank for 34 mainly developed country governments had made in in 2013:  "To promote effective evaluation, ensure all innovation and enterprise supports have sunset clauses."

Bruton had nothing to say on sunset clauses and I risked lèse majesté by telling Yves Leterme that while the OECD's March report on the digital economy and international tax rules, highlighted that Ireland was the second biggest services exporter in the world after India, most of the Irish total was related to tax avoidance strategies of foreign-owned multinationals.

On Page 20 of the OECD study [pdf], Ireland is shown to lead the developed world in ICT (information, communications, telecom) sector, but that is because almost half of reported services exports are effectively fake. See the following report for more information:

OECD BEPS Project: Ireland should embrace corporate tax reform

Last month we looked at how little has changed in conservative Ireland post the crash and how dissent is squashed by what could be termed the establishment.

Celtic Tiger RIP: Change in conservative Ireland six years after crash

This is the backdrop for the small mainstream media and the threat from restrictive libel laws was highlighted earlier this year when three journalists at two of the three national daily broadsheets, demanded and received monetary compensation from RTÉ, the public broadcaster, arising from allegations made in a television programme that they were homophobic.

Last week The Irish Times reported that Kevin Bakhurst, RTÉ’s managing director of news and current affairs, said one of the ways broadcast news was under pressure was through increased and costly legal challenges and threats.

He said RTÉ was facing legal actions from “some well-known political figures.” While some actions were fair, others were “spurious, expensive and are a public game of who-blinks-first, with a major price tag attached on our side - - and where we are dealing with public money.” He added there were “a small number of extremely wealthy and extremely litigious individuals who seek to use the courts to shut down any public debate or discussion of their affairs - - which in most cases would be perfectly legitimate areas of exploration or discussion. I think probably enough said on that one.”

There is no shortage of opinion columnists in the Irish media and while term-limits would help in this area in the interests of change, the problem is with unreliable data that is reported as fact and issued to ministers for talking points propaganda.

Most headline Irish economic data should not be taken at face value because of distortions caused by the foreign-owned sector including massive corporate tax avoidance.

GDP (gross domestic product) includes the profits of the foreign sector; GNP (gross national product) is increasingly polluted by big foreign firms becoming 'Irish' through moving their headquarters to Ireland; exports and productivity data are also unreliable as are employment data - - 85,000 unemployed in publicly funded activation programmes are not counted as unemployed.

PMI (purchasing managers index) survey data are also unreliable - -  Further sharp rises in activity and new business were recorded in February services survey. Meanwhile, the official CSO services index for February fell 2.9% and the annual increase was only 1.9%.

Tax-related revenue diversions by the likes of Google, Microsoft and Facebook boost the PMI data.

During the property bubble, many of the journalists covering the sector were cheerleaders while we noted in our piece on conservative Ireland that when the members of the Oireachtas have nothing to say and most technology journalists are cheerleaders of the high tech sector, any debate on the inflation-adjusted €24bn spent on science policy over the last decade would be confined to the web -- which in Ireland was long-viewed with suspicion by long-in-the tooth journalists.

The addiction to political spin destroys the opportunity to improve policy making.

If ministers are not called out on bullshit by journalists in command of facts, then there is no incentive to change.

Lexington, the US columnist of The Economist writes this week:

Washington’s passion for data does not signal the start of a new Socratic age, in which the political classes jointly search for truth. In today’s politics everything is a weapon with which to club the opposition. Why should facts be different?"

In Ireland at least, there isn't a similar level of polarisation and facts behind distorted data would improve accountability.

While, Minister Bruton expressed no doubt about the jump in farming jobs at his cited press conference, the CSO in vain cautioned [pdf; page 2]:

In the case of the Agriculture, forestry and fishing sector it can be noted that estimates of employment in this sector have shown to be sensitive to sample changes over time. Given the introduction of the sample based on the 2011 Census of Population as outlined in the note on the front page of this
release, particular caution is warranted in the interpretation of the trend in this sector at this time."

Prof John FitzGerald added to his comment above:

To better understand what is happening in Ireland today significant additional data are needed, supplementary to the national accounts, which would show the contribution of each sector of the economy to GNP."  

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