Wednesday, November 09, 2011

The Celtic Tiger's sore spot

Whipped into a froth of righteous indignation by a Daily Mail report -- always a shaky stool -- Dan Mitchell of the Cato Institute (via Forbes) launches into a denunciation of Ireland's incoming President, Michael D. Higgins:

He’s also an economic illiterate or a cynical hack who apparently thinks noble poverty is a good idea for the other 99 percent.

Here’s some of what the Daily Mail reported about one of his recent speeches.

"Michael D Higgins launched a savage attack on the Celtic Tiger in his first speech as President elect. In his acceptance speech, the Labour Party candidate…rejected the years of materialism and selfishness that drove the country to ruin. …Michael D declared: ‘We leave behind a narrow individualism that valued the person for what was assumed to be their accumulated wealth but neglected the connection between the person, the social, the community and the nation. …Mr Higgins called on Irish people to return to ‘co-operative and collective values’."

Isn’t this just wonderful? This pampered and cosseted member of the political elite thinks that Ireland somehow was demeaned by being the Celtic Tiger. Does this mean he wants to go back the mid-1980s, before Ireland began to reform? Back when government was consuming more than 50 percent of the nation’s output? Back when the the corporate tax rate was 50 percent? Back when other tax rates were at extortionary levels?

If that’s true, he wants to dramatically reduce the living standards of the Irish people.

This is strange on several levels.  First, Mitchell seems to have conflated Michael D with Eamon de Valera, who in the much more powerful position of Taoiseach (Prime Minister) infamously invoked what he saw as a better Ireland of athletic youths and comely maidens while pursuing a much more statist and isolationist policy than the country has now.  As President, Higgins will have no such influence of policy and that's not his leaning anyway.

Because what's truly revealing here is that Michael D made no specific reference to any policy choices or indeed the supposed virtues of the 1980s.  Instead it was his denunciation of individualism that caught Mitchell's eye.  In other words, it's not so much that a genre of corporate tax policy or light-touch financial regulation drove Ireland into the ditch -- it's that Ireland's economic troubles can be read as an indictment of a broader economic philosophy of everyone-for-themselves/I've got mine boosterism.  That wound will apparently take time to heal.

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