A minister speaks from fantasy island

How can we trust a government that insists on describing the economy in a way that is completely at odds with the fact? By Michael Taft.

Even when presented with cold hard reality, Government ministers refuse to acknowledge it, preferring to live in a fantasy island. Spin is one thing, denial is another.

Take Lucinda Creighton on RTÉ’s This Week programme.  She was being interview with John Douglas, General Secretary of MANDATE on the issue of the Fiscal Treaty. Douglas was putting the case against the treaty. The minister responded with arguments for a Yes vote.

Minister: “Since last year, 2011, the economy has returned to modest growth but nonetheless it has emerged from recession.”

RTÉ: “Are you saying that we are out of recession?  But are we technically out of recession? Surely that is open to dispute.”

Minister: “We have emerged…”

The minister is clear: we have emerged from recession and returned to modest growth.  Unfortunately for the minister, the economic data shows just the opposite.

quarterly gdp growth 2008-2011 

In the last two quarters of 2011 (the last period we have data for), the Irish economy contracted. Two quarters of negative growth = recession. In other words, we have entered a double-dip recession after two consecutive quarters of growth (in quarter 1 and quarter 2).

Strike one against Creighton’s claim that we have “returned to growth” and “emerged from the recession”.

quarterly gnp growth 2008-2011 

If GDP figures are bad, quarterly GNP growth is even worse.  Not only did it fall in the last two quarters of last year, it fell in three out of the last four quarters at a faster rate than the fall in GDP.

Strike two, Minister.

domestic demand 2008-2011 

Worst of all are the domestic demand figures. In 16 quarters, domestic demand has only been north of zero in three quarters. The last two quarters show a substantial decline – you’d have to go back to late 2009 to find a worse out-turn. This is not an economy emerging out of anything.

Strike three, Minister.

There is a larger point here than just that a Government minister refuses to faces up to facts (and to be fair to Creighton, all ministers spin this same line). The issue is more fundamental – how can we trust a government that insists on describing the economy in a way that is completely at odds with the fact? How can we trust this Government on the issue of the Fiscal Treaty, which involves further austerity? How can we trust the Government to describe adequately the impact of the Fiscal Treaty on the economy when it refuses to describe the economy as it currently exists?

This is not just spin gone ludicrous. This goes to the heart of an open and honest debate about the Fiscal Treaty and the future of the Irish economy – a debate the Government refuses to entertain. Creighton referred to John Douglas's arguments against the Fiscal Treaty as 'fantasy' and went on to say:

“We have to face up to reality.”

Yes, we do. Unfortunately, Government ministers insist on delivering exhortations from their own fantasy island. Meanwhile, the rest of us have to make do on this island - an island that has returned to recession. {jathumbnailoff}


Image top: Celso Junior.