We seem to be watching a new elite consensus view being formed. As ever, it’s wrong, wholly wrong, but it is, we think, very fun indeed. In that forehead slapping, “No, really, they’re not trying this are they?“ definition of fun.
So, Ireland:
At the core of it were a number of key propositions. Ireland would have to embrace the idea of free trade, which meant encouraging competition and ending the protectionism that had been the hallmark of Irish economic policy under Lemass’s predecessor Éamon de Valera (whose economic philosophy had once been satirised as: “Burn everything English except their coal”). Most importantly, though, the strategy required that, henceforth, Ireland would have to be welcoming to foreign capital, which essentially meant being nice to multinationals – giving them generous tax breaks, assistance in finding locations for building and generally bending over backwards to attend to their needs.
Whitaker’s was a bold strategy, but it worked.
Ireland got rich by being standardly classical liberal sensible. OK.
There’s a massive shortage of affordable housing and an associated homelessness crisis: nearly 12,000 people in emergency accommodation and average monthly rents of €1,468;
But there’s a problem associated with those riches. Hmm. The source for this is:
The national budget surplus – essentially the difference between the amount of money coming in and going out in day-to-day expenditure – is forecast to add up to €65.2bn (£56.3bn) over the next four years.
Loadsamoney - Ireland is rich.
This has made Ireland an “outlier”, according to Prof Barrett, who pointed out more than 25% of tax revenue in the Republic of Ireland comes from corporation tax – compared an average figure of less than 10% across Europe.
The money’s made by stinging the capitalists. Rather a Laffer Curve there in fact - low rates means lots of capitalists and so beaucoup de revenue. Could be a plan for more countries really.
Nationwide, the touchstone social and political issue is housing.
Homelessness in Ireland is at a record high – with the most recent figures showing 12,600 people were in emergency accommodation in June.
But the housing shortage is having wider effects.
Ah, housing.
So, The Observer and the BBC agree here, and that is one of those elite consensi forming. Obviously. Ireland’s got rich because low taxes on corporations but this cannot be allowed - we can’t have an example of actual classical liberalism working now, can we - because housing.
And where the argument becomes, in the local argot, a bit of a cute hoor:
Rent controls are a fiscal policy that governments around the globe incorporate to control and regulate the amount that a landlord can charge for a lease of a property. The challenge lies in finding a balance between the rights of sitting tenants, new tenants and landlords. Rent regulation that is too strict can have a negative impact on the market, but complete deregulation can also have negative effects as it will push people into home ownership even where it is not feasible.
And:
Government measures to control rents have backfired and in many cases have led to an increase in rents, a new report has claimed.
The study by economist Jim Power suggests that rent pressure zones (RPZs), introduced in 2016 to limit rent price increases, have resulted in significant "rent rigidities" and an inefficient two-tier system where the proper maintenance of rental properties is no longer economically viable.
Rent controls are not a classical liberal policy. Rent controls are what are screwing the Irish rental property market.
Which is where that argument becomes so fun, isn’t it?
Classical liberalism makes a place rich. Not classical liberalism on rents makes housing expensive. But as the argument - that elite consensus view - is becoming it’s the bit that works, the stinging the capitalists for the costs of running the state that must go and it’s the idiocy of rent controls which is unquestioned and so presumably should stay.
Well, it would be a fun argument if it wasn’t palpably so damn stupid an argument.