Can we find our way again?

WARNING: THE BLOG IS CALLED THOUGHTS AND RAMBLINGS - THE THOUGHT PROCESS OF THIS POST IS QUITE DISJOINTED

The Background to my Ramble
IF we consider the issues facing Ireland in 2013 in the context of Ireland in 1993, there's no doubting that we're wealthier as an economy, poorer as a society, and just plodding along as a nation.

With all the talk of Croke Park II being a complete monster, ministers being snubbed by public sector unions (some rightfully so), and people losing jobs, there is a narrative the the government is out to get your pay packet, they have no concept of reality and that there are no jobs out there.

If we look at it from another point of view. The expenditure of the Dept. of Health/HSE was €6 billion in 2002, €9.1 billion in 2005 and estimates for 2013 (as reporting has changed) project an expenditure of €13.6 billion, more than twice what it was in 2002.

Total Exchequer expenditure in 2002 was €33 billion and €49 billion in 2012.

Core Consumer Prices are up from 82 to 102 (or 24%) during the period 2002 to 2012, yet government expenditure is up twice that amount.


Source: tradingeconomics.com

I don't begrudge a decent wage to anyone, but the definition of a decent wage is generally seen as "my salary + a bit more".

There is a wider divide at play here. Public sector pay has increased greatly due to benchmarking, but benchmarking against private sector rather than other OECD public sectors, as hindsight would now show to have been wiser.

The narrative both within Fianna Fáil and Sinn Féin is the public sector worker is being hammered, and from government is that they wish they didn't have to cut it, whereas the reality is Ireland was paying its public servants more than it could sustainably afford for much of the last decade. These pay increases would not have been awarded to the extent that they were by any government taking a long-term view.

Where we lost our way
I recently watched a clip of  UK Labour MP Glenda Jackson launch a tirade against Thatcherism, it's destructive effect on the UK and the legacy of it's leader. Although my favourite part of the clip was watching the Speaker of the Commons put some Tory toff back in his box, the most striking  thing from Jackson's articulate, considered, top class oration was the line:

"Greed, selfishness, sharp elbows, sharp knees... an aspirational society, it aspired for things...people knowing the price of everything, and the value of nothing"

She raises a valid point. Whilst it is often said Fianna Fáil blew the boom, people fail to realise that Fianna Fáil gave the boom to the people, which turns out had a worse effect. We got roads, hospitals, schools social amenities, but to imagine the steps forward we could have taken if the conditions weren't created whereby a young couple who were, taking a common example, an accountant and teacher could walk into a bank, and not only get a mortgage for a home, but also leave with a loan for an investment property, then we wouldn't have had a property bubble, we wouldn't have had a banking collapse.

The narrative has to change. The government isn't out to get anyone, it's attempting to rectify a gross mistake, a mistake made in good faith and with the best of intentions, to give people money, rather than provide them with state services, to inflate wages, therefore prices.

Paying our public servants well is by no means a mistake, but paying them too well, and creating conditions whereby planned pay rises (for that is what increments are to anyone living in the real world)  could be used to leverage loans, was a fatal mistake made by every government since the mid 1990s, which has left Ireland morally bankrupt.

We will get over the money. It took the Germans a century to pay back Versailles. They've lost everything, twice. Maybe when German legistlators become outraged at our cost base we should listen up. We will get over the money we have foolishly enabled ourselves to lose through the ballot box, what is yet to be seen is whether our society can recover, can we again become a nation where we know the value of everything, and the price is a secondary factor.

One of the greatest gifts my parents ever gave me was the freedom to learn the value of money. From a young age I earned my own money, and I had to figure out how best to spend it or not. Many people of my generation, and those born in the 90s have surpassed the conundrum posed by Glenda Jackson, they know neither the price nor the value of anything, because they never had to buy anything for themselves, let alone earn the money to get it.

Until we have a society supported by an economy Ireland isn't recovering anytime soon.