Job subsidies will not be effective

[amblincork]

Here is part of an interseting article by Sarah Carey in today's Irish Times[

I]Time to admit that job subsidies will not be effective
.' somethin'Even left-wing economists agree that the plan to spend €250 million on job subsidies will not work, writes SARAH CAREY

I NEARLY fell off the couch the other night. There I was with one eye on the Grey’s Anatomy season finale and another on the internet. Then I saw it – the pseudonymous blogger Sli Eile on “progressive economy” agreed with a post by UCD economist Karl Whelan on “Irish economy”. The marriage of the terminally ill but suspiciously healthy looking Izzie would have to wait.

Irish economy is the group blog of academic economists where the financial crisis is analysed using classical economic theory. The “progressive” economists set up a rival blog on which they interpret the crisis from a left wing perspective. Everyone’s terribly polite, but the tension is palpable.

Yet on this night, on one point, the economists were in agreement: the plan announced by the Government to reduce unemployment by spending €250 million on job subsidies will not work. If the lefties were willing to concede the point to the academics then it must be true. The benefits of subsidies are described as “marginal” which means minimal. The failures are well accepted.

They are a “deadweight loss” which means that money inevitably “saves” jobs that were never in peril. Subsidies interfere with the process by which jobs are lost, even in the boom years, as particular sectors die natural deaths. A subsidy for one company could result in another going under as they are placed at a competitive disadvantage. The potential for corruption is enormous. Remember Export Credit Insurance when someone decided that one company should get most of the cover? The subsidy becomes either a tool of political patronage or a bureaucratic nightmare. Where does the money come from anyway? The €250 million has to be found from cuts elsewhere.[/I]

[goosebump]

Here is part of an interseting article by Sarah Carey in today's Irish Times[

I]Time to admit that job subsidies will not be effective
In this section »
Dismay over size of Leech award is misplacedProtestant abuse victims must also be heardBickering between parties will not advance Lisbon causeJuly 1st, 1972: McLuhan declares end of consumer agePublic service reform needs complex approachMoonwalking Jacksonmen wanna be startin' somethin'Even left-wing economists agree that the plan to spend €250 million on job subsidies will not work, writes SARAH CAREY

I NEARLY fell off the couch the other night. There I was with one eye on the Grey’s Anatomy season finale and another on the internet. Then I saw it – the pseudonymous blogger Sli Eile on “progressive economy” agreed with a post by UCD economist Karl Whelan on “Irish economy”. The marriage of the terminally ill but suspiciously healthy looking Izzie would have to wait.

Irish economy is the group blog of academic economists where the financial crisis is analysed using classical economic theory. The “progressive” economists set up a rival blog on which they interpret the crisis from a left wing perspective. Everyone’s terribly polite, but the tension is palpable.

Yet on this night, on one point, the economists were in agreement: the plan announced by the Government to reduce unemployment by spending €250 million on job subsidies will not work. If the lefties were willing to concede the point to the academics then it must be true. The benefits of subsidies are described as “marginal” which means minimal. The failures are well accepted.

They are a “deadweight loss” which means that money inevitably “saves” jobs that were never in peril. Subsidies interfere with the process by which jobs are lost, even in the boom years, as particular sectors die natural deaths. A subsidy for one company could result in another going under as they are placed at a competitive disadvantage. The potential for corruption is enormous. Remember Export Credit Insurance when someone decided that one company should get most of the cover? The subsidy becomes either a tool of political patronage or a bureaucratic nightmare. Where does the money come from anyway? The €250 million has to be found from cuts elsewhere.[/I]

You need to go back over this post. It doesn't contain any references to Dan Boyle.

[kerrynorth]

She is absolutely correct of course. For ICTU and the government it is the only means of giving the perception that they have any ideas, when in reality they have none. And for IBEC it is money for old rope for their members. But the taxpayer gets leveled with up to another €1billion in debt for this window dressing vanity project.