Tony Judt, writing in 2006 used the phrase ‘useful idiots’ to describe a new cohort of American liberals who were happy to use their considerable intellectual reputations to endorse the morally repugnant actions of the US Administration in the Middle East. The phrase came to mind, perhaps uncharitably, while reading Sli Eile’s response in the Progressive Economy and David Begg’s right of reply piece in the Irish Times today, both written as reactions to Sarah Carey’s column in yesterday’s paper. It seems that because her attack on the idea of state intervention in the jobs crisis was based on yet another silly mistake, we now have a great opportunity to highlight the class dimension of the employment crisis, argue for the concentration of resources to help grow a real indigenous economy, and to demand proper focused training in the only area where growth is likely to occur - and to do all of that while acknowledging that we will need to fix the structural problems in the Irish economy - but only where it is appropriate - in the medium term.

If you read his piece, you might notice that the analogy of Judt’s ‘useful idiot’ doesn’t exactly work, of course. After all it is not as if ideologically or politically, Sarah Carey could be attributed as ever having ‘liberal’ (or progressive, if you wish) creditials in the way that Judt describes them, or that she has a considerable intellectual reputation. She is just a columnist in the Irish Times.

But it is true -  and unsurprising - that Carey’s column is agenda driven and her agenda over the last number of months has been to attack the unions and maintain the idea that the ‘Dublin Consensus’, as described by Sli Eile, is not an argument on one side of the economic debate but is an unassailable truth - at least in the minds of Irish Times readers.

The phrase is apt though in the way that Carey’s arguments spookily mirror those of the government. But what makes it particularly appropriate for me is that it is by making mistakes that she has proved most useful. Not to those who agree with her, but for the Left.

The first mistake, of course, was to erroneously describe Irish social welfare payments as being the most generous in the EU. We’ve been over this here in ILR too many times already, but her making the mistake provided us with the opportunity to challenge it, and for the outcome of that challenge and admission of error to be played out in the nation’s ‘paper of record’.

The second mistake was falsely attributing the impetus behind the job subsidy, announced by the government, to the machinations of ICTU. Of course, firstly, Carey was merely echoing - again - the suggestion originally made by Karl Whelan on Irish Economy, and Carey does mention that business groups had an interest in it too. But it is her attempt to use the flawed thinking behind the governments job subsidy program as a stick to beat ICTU that she provides an opportunity for those on the progressive side to get to the real crux of the matter.

For Sli Eile of Progressive Economy it provided him/her with the opportunity to illustrate the nature of the current consensus on the economy, dubbing it the ‘Dublin Consensus’ (after the better known Washington Consensus). The consensus goes like this:

1. Sort out Banking through some form of toxic-containment (folks differ on the details)
2. Frontload big, immediate cuts in nominal wages in the private and especially the public sectors (real ‘plain vanilla’ cuts and not just voluntary contributions from the judiciary, contrived ‘pension’ levies and various stealth charges)
3. Frontload big, immediate cuts in public spending across the board from pay (see above) to social welfare (‘the highest in Europe’ false claim) to ‘wasteful’ capital projects to other items
4. Bring the low and middle-income groups back into the tax net
5. Downsize and reform the public sector

Beyond this, the consensus argues, there is not much worth talking about. In fact the discussion of alternatives to this are barely mentioned, or if it is they are summary dismissed. Sli Eile says that the debate should focus, not on who or what sectional interest is driving which initiative, but on the real issues. These are:

1. Domestic fiscal stimulus versus profound fiscal deflation for 2009-2012/13
2. Skills, innovation and growing the indigenous economy on world markets versus business as usual depending on FDI and a relatively protected and cosseted non-traded sector (as in price controls, costs and rigid work practices in the case of the public and civil service)
3. Corporate governance change versus cosmetic name change
4. Finding another way of dealing with banking rather than bleeding the whole country with a blanket cheque to recapitalise the failed (with the bail-out of Anglo-Irish ultimately costing more than an entire year’s education budget)

The mistake also provided David Begg with the opportunity to not only challenge the suggestion that the impetetus for the job subsity came from Congress, but to emphasis it’s own criticism of the government’s idea:

The truth is that precisely this approach has been repeatedly proposed by employer and business groups. We have opposed such feckless initiatives from the outset.

Over the course of six months of talks with the Government - with the Taoiseach, his Ministers and senior officials - congress made it known that such a limited and conservative approach to the jobs crisis would be a criminal waste of scarce resources, especially when such resources could be put to good, productive use.

So, Sarah Carey, ICTU, Sli Eile, Karl Whelan, and even Brian Lenihan, agree. It must be true, then, that the job subsidy as proposed by the government and lobbied for by business groups is a stupid idea.

Does this mean that there shouldn’t be some form of intelligently directed state intervention in the jobs crisis, with unemployment rising, as Brian Cowen has admitted, to 500,000 by the end of the year? Don’t be stupid.

Sli Eile, in his/her list of the real issues mentions “skills, innovation and growing the indigenous economy on world markets versus business as usual depending on FDI and a relatively protected and cosseted non-traded sector”.

David Begg in his piece draws attention to Congress’ Job Creation and Protection Plan, which argued that “all the machinery of the State” should be “harnessed to the goal of tackling the unemployment crisis.” The document itself says that any plan must be made…

‘more responsive, supportive and coherent, with the overriding goal of:

• protecting peoples incomes.
• protecting existing jobs
• creating new employment and the provision of training

Begg, in the Irish Times today makes the case for an appropriate response to the jobs crisis:

It is our view that unless and until the Government begins to treat the jobs crisis as at least being equal in magnitude and scale to the banking crisis, it will not be capable of tackling it in the manner required, let alone address it. Thus, the congress plan called for a “range of new, innovative and creative measures that will harness all the machinery of State to the same objectives - protecting jobs, creating new employment and training and protecting peoples’ incomes”.

The plan included a wide variety of measures designed to ensure that redundancy was a “last resort.” It included ideas such as job rotation; State support for short-term working; a social employment programme to meet gaps in social infrastructure; reforming the social welfare system; changes to employment law and a more focused, strategic approach to training.

A more focused strategic approach to training and a need to grow the indigenous economy on world markets is also at the heart of another post on Progressive Economy. Professor Seán O’Riain, of NUI, Maynooth, has written a very thorough post on the class dimension of the latest Quarterly National Household Survey published by the CSO last week. (As an aside, in another inaccuracy Carey suggested that Progressive Economy and Irish Economy are rivals, yet Professor O’Riain’s post was published on both blogs. When academics (on PE and IE) look for informed dialogue, ideologues like Carey call it war talk.)

In summary O’Riain says that the survey points to the “disastrous collapse in working class employment with growing differences between the position of those with third level education and those without. The need for serious commitments in enterprise and employment policy, education and training policy, and housing/ mortgage support is clear.”

Although unemployment has increased sharply for those with a third level education relative to their employment rates prior to the crisis, the sectors in which they are typically employed have remained relatively stable. The sharp rise in managers getting the chop could be down to the fact that many small businessness have collapsed. But it is in the relatively low-skilled areas that unemployment has been the most profound, and as the skill level is usually the same within families - people tend to marry within their own class - this means a devastation of swathes of working families and of course, communities:

The class divide in the impact of the recession stands out. While the pain is being felt all around, the sectoral, occupational and educational data points to both the particularly disastrous short-term and long-term effects of the recession on those in manual and service occupations. Given what appear to be high rates of intra-class marriage in Ireland (Brendan Halpin and I have an interesting article on this using data from the mid-90s), the worst effects of the recession are likely concentrated in particular classes and households. If we add in the heavy impact of recent unemployment in the 25-34 and 35-44 age group then the implications for housing and household solvency are very serious, as noted on this site previously.

Of course, in the past there was a solution to this type of problem. It was called emigration.

Considering the social and economic impact of this it doesn’t seem very smart to sit on the side line hurling stones at the ‘intransigance’ of the unions and their inability to do the ‘patriotic and pragmatic’ thing and accept that real power does not lie in their hands. It is much better, the wisdom goes, that they give up and let the powers that reside in Merrion Street run the show into a prolonged and agonizing recession.