Thursday, December 8, 2011

Not EVERYTHING is about the Economy

Ever since good old Bill Clinton sited “It’s the Economy stupid” in his election campaign it seems that the economy is the only game in town. I’m using the word “seems” here for a good reason by the way. I was blessed that my Economics teacher in school was Dominic McQuillan, and Dominic was a great man for the “tend”. He was always at pains to point out that Economist really cannot be certain of anything; this is not an exact science by a long way. In simplistic terms economics is very simple, generate X income, spend Y and you are left with either a flat balanced budget, you have some savings or you need to borrow to make up the shortfall. Looking at all the commentators over the last number of years you would think that this is the easiest thing in the world, why in Gods name are they not keeping it simple, tax people more, cut spending from the public purse and Bob’s you uncle, you’re balanced! If only it was that simple – but it really is not.  Case in point, today I saw a You Tube video making the following argument…
There are three stakeholders (an unemployed person, the government and an entrepreneur) in a situation described as follows. The unemployed person wants to work, the government pay them c€200 each week on the dole, but nobody is willing to employ them. The entrepreneur wants to employ them but cannot afford to. So (my god this is SO simple – why don’t we just do it!!) the government should pay the unemployed person nothing, the entrepreneur gets the €200 from the government and adds another €150 to it to pay the person €350 per week. Entrepreneur is able to grow their business, government get the live register to zero and the unemployed have gainful employment, additional cash and dignity restored, happy days.
There are clearly cases where this would work, and to have the state basically subsidise private enterprise. What I find a bit had to fathom is that a business believes (this person runs a restaurant) that they could get staff with a government discount, and their neighbour running a similar business is paying their staff full whack. I would think that a large number of people would be put out of work and then re-employed with the additional government monies.
But even still – it’s never THAT simple. What about those who can’t work, for whatever reason.   What about those who do not have the required skill sets to carry out these new jobs (a waiter who cannot read, or was blind for example).  As a society we are more than simply an economy.   We are people who share a space.  It would be great if we got classroom sizes down to 10 or if all medical care was funded centrally, or if we had full employment, zero crime etc. Increase taxes to 80% and you’re on the road to getting everything on your wish list. Not realistic? So what gives? You can’t get blood out of a stone, so there is no point in trying to take more from those who have nothing.
In a decent society we look after the vulnerable, not because of economics, but because we want to live in a decent society.  These are very tough choices that need to be made, but they cannot be ignored.

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