David McWilliams RTE programme on inequality

Hi Leper

The thesis presented by David McWilliams is that wealth inequality increased in Ireland during the recent recession. However, data published by the CSO shows that the exact opposite occurred - wealth inequality was actually lower in 2011 than it was in 2006.

To be fair, Central Bank analysis of these data does indeed indicate that wealth inequality has increased since 2011 but it remains lower than in 2006, the earliest period for which these data are available.

Ireland has the most progressive income tax regime in the EU (a point recognised by David McWilliams in the programme) and wealth inequality in Ireland for 2013, as measured by the Gini Coefficient, is lower than the eurozone average. The results also show that wealth is less concentrated at the very top of the distribution in Ireland than the eurozone average.

I am personally of the opinion that we should actually take pride in the re-distributive impact of our tax system and the fact that core social welfare rates were preserved during the recession.
 
Brendan Burgess said:
The banks were not bailed out. The depositors, most of whom were ordinary people, were bailed out. They should not have been. It was a transfer from tax payers to people who were well enough to have deposits.
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So it was depositors, not land developers who borrowed millions from the banks with many never paying back a cent were the cause of the banks been bailed out.
 
I don't think anybody is suggesting that depositors in the covered institutions caused the financial crisis but they (along with bondholders) certainly benefited from the State intervention.

To be fair, retail deposits have benefitted from state protection in some form in most developed countries for decades but the scope of the famous State guarantee was controversially broad.
 
moneybox said:
So it was depositors, not land developers who borrowed millions from the banks with many never paying back a cent were the cause of the banks been bailed out.
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Hi moneybox

It was the developers who were the main cause of the insolvency of the banks.
The banks were not bailed out i.e. the shareholders did not benefit from it.
The depositors and bondholders should have taken a huge hit. They took no hit.

In summary, the taxpayers bailed out the depositors.

Brendan
 
Brendan Burgess said:
Hi moneybox

It was the developers who were the main cause of the insolvency of the banks.
The banks were not bailed out i.e. the shareholders did not benefit from it.
The depositors and bondholders should have taken a huge hit. They took no hit.

In summary, the taxpayers bailed out the depositors.

Brendan
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How would something like that work ? For example if I had a mortgage with a bank for 200k and savings in same bank for 100k , if in theory they had of hit depositors , would they knock the 100k off the mortgage ? I wouldn't be too keen to pay them bank back 200k if they just lost my 100k deposit !! In fact I'd flat refuse too I'm sure others would too and it be chaos
 
Wealth inequality must have risen.
1. Those caught in negative equity.
2. Those caught with barely manageable mortgages.
3. Those caught with income reductions.
4. Those caught in higher rents.
5. All caught by flat taxes, (which % wise hit poorer harder)

Could it be that statistics cannot catch that the working squeezed are being pushed into a lower section.
The upshot is that the cohort of the (unequal) is getting larger and now means that too many workers are effectively a new poor ,caught in a trap of surviving ?
 
Here are the only hard data on the topic, from a presentation by the Central Bank.

upload_2015-9-25_10-8-40.png

The higher the Gini coefficient - the higher the inequality ( If one person owned everything and no one else had anything we would have a Gini coefficient of 1; If we all had exactly the same amount of wealth, the Gini coefficient would be 0)

And we are about mid range for other Eurozone countries.

upload_2015-9-25_10-12-57.png
 
Sarenco said:
Hi Leper
I am personally of the opinion that we should actually take pride in the re-distributive impact of our tax system and the fact that core social welfare rates were preserved during the recession.
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Please note that most welfare rates were cut twice.

JSA was cut from 204 to 196 to 188.

State Pensions were not cut.
 
Protocol said:
Please note that most welfare rates were cut twice.

JSA was cut from 204 to 196 to 188.

State Pensions were not cut.
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Fair enough - I should have said that welfare rates were preserved in real terms during the recession. We obviously had material price deflation during this period so the spending power of welfare recipients was essentially maintained.

The fact that the welfare system was relatively unchanged in the face of a massive increase in the numbers depending on it was no mean feat. I personally think that was a policy decision made by successive governments that we should applaud.
 
Joan Burton often says she's proud of not cutting welfare rates.

She is correct, as the two cuts were pre-2011 election.
 
Protocol said:
Joan Burton often says she's proud of not cutting welfare rates.

She is correct, as the two cuts were pre-2011 election.
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So the elimination of the berevemant grant, phone allowance for pensioners, changes to maternity payment entitlement, limitations to access to full JSA to people over 24, reduction in child benefit, reduction in back to school allowances, reduction in respite care were not welfare cuts?
 
Gerry Canning said:
Could it be that statistics cannot catch that the working squeezed are being pushed into a lower section.
The upshot is that the cohort of the (unequal) is getting larger and now means that too many workers are effectively a new poor ,caught in a trap of surviving ?
Click to expand...
Gerry, I don't think that there will be many arguing that during the past 7 or so years there was a significantly increased level of hardship suffered predominately by the middle to lower earners in our population. However does this in itself signify that this decline in living standards by that cohort was in any way related to a pro-rata increase in income of those currently on the "Rich List" which is the tenet of the argument made in this programme?
For example if Denis O'Brien increased his net wealth by say 500 mln in that period did he do so at the expense of the rest of us? That increase in wealth would predominately relate to his expansions abroad and potentially the added value in his companies due to increases in the share price. I just don't see any co-relation between the two changes in wealth. Because a certain cohort of people in the country are getting richer it does not follow that it is at the expense of the broader population. Wealth is not cash and there is not a limited pool of wealth where if we see the rich getting richer it must naturally follow that the poor are getting poorer. Aspirational Socialist equality is all very well if we can all aspire and have equal opportunity to climb the ladder towards our perceived goals. However I find that in practice most Socialsts aspirations are to bring the rich down to their level rather than giving us all more opportunities ourselves to achieve our own goals.
Absolutely we are not an equal society and there are many amongst us who don't have those opportunities. But in practice most people are not aspiring for opportunities to attain a good job and a good lifestyle they are more concerned with the end product rather than the means to achieve that end product. I.e. "I want your wealth" rather than "I want your opportunities".
Why begrudge the rich unless they genuinely have gained their wealth illegally or immorally? We are not the only nation of begrudgers but we are certainly up there with the best of them!!
 
thedaddyman said:
So the elimination of the berevemant grant, phone allowance for pensioners, changes to maternity payment entitlement, limitations to access to full JSA to people over 24, reduction in child benefit, reduction in back to school allowances, reduction in respite care were not welfare cuts?
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I'm not defending Joan Burton.

She is careful to refer to "basic welfare rates".
 
Brendan Burgess said:
Here is how the Journal previewed the programme. The article reproduces the charts.

View attachment 877
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"The income of those who make money exclusively from shares and assets [...] has gone up 500% since 2008" Did either the Journal or the programme mention that 2008 is not the best year to take a baseline?

An hour ago, I was kicked in the proverbials. I'm 500% happier now. Woohoo.
 
 
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