Michael D Higgins may be a poet but his economics rarely rhyme

Businesspeople and politicians are not so unalike. Both are adept at figuring out what is popular – businesspeople so they can sell it for profit, politicians so they can say it for praise. Often they go about this work in slightly different ways.

In business, the potential popularity of something – a new product, trend or service – usually is confirmed by laborious market research: focus groups, surveys, A/B testing and that sort of thing. Political parties do some of this kind of research, too. But politicians themselves are more innate in their judgment. They adjudge what is popular to say from their instincts, and also because they listen as much as they speak. With their political snouts, they can sniff popularity on the wind.

Few have a political proboscis as sharp as the one possessed by President Michael D Higgins. He demonstrated this yet again on Tuesday when he decried the Government’s policy approach to housing, citing the results of it as a “disaster” and a “great, great failure”. He knew what he was at.

Just 24 hours previously, the President was heavily criticised by a Nigerian bishop for bizarrely linking an Islamist massacre in a church there to climate change. The bishop accused him of “deflecting from the truth”. He was under pressure and facing real scrutiny. So could it be that Higgins stuck his ample political schnozzle in the air, twitched it a few times, and drew into his lungs the hot anger of a generation of young people who cannot buy homes or find affordable ones to rent?

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He let it all out in a crowd-pleasing speech in Naas at the opening of a new facility for young homeless people. Suddenly nobody was talking anymore about his botched comments on Nigeria. Instead, many people were praising him for his forthrightness and valour, while the rest, including Government Ministers, fumed impotently at his partisan tendencies. Higgins would have known the reaction. He is an ace marketeer, even if such a compliment might make him recoil.

Populist fruit

The days-long furore following the President’s comments has been intense but, to objective ears, his speech wasn’t especially impressive if you listen to it closely. He roared and shouted a bit but, ultimately, he gorged on low-hanging populist fruit. It may be difficult to argue with his assessment that housing is currently a disaster and that successive policy platforms on the issue appear, so far, to have failed. But that is self-evident and merely a truism. Any barstool bore could say it and get applause.

The more telling parts of Higgins’s speech were contained in his withering references to international capital. Here, his ideology and worldview, but also the limits of his knowledge of international finance and capital markets, were laid bare. The president is brilliant at identifying the social consequences of policy failures. But rarely does he show any genuine insight into the remedies for economic problems. His prefers boilerplate ideology – sloganeering and fiery questions with few real answers.

Higgins angrily suggested that Ireland was trying to be a “star performer for the speculative sector internationally”, which appears to be a reference to the international funds that have pumped billions of euro into the Irish property market over the past 10 years, and made billions more in profit.

It echoes a standard socialist criticism of recent governments, which holds that Irish politicians are uniquely in thrall to international funds and design policies to please them – and to hell with the people. The problem with it is there is scant credible evidence that it is accurate. Why would they design policies just to be the “star performer” for Wall Street funds, over and above the needs of Irish people who elect them? It would be self-defeating.

[ Analysis: Is President Michael D Higgins really ‘beyond criticism’? ]

[ Miriam Lord: First Citizen on the verge of going full-blown Michael D ]

Systemically venal

It is fine to argue this, but show us the evidence for such a grand claim. There would be plenty if Irish policymakers really were that systemically venal or pliable. I believe Irish politicians court international funds because they think the economy, and the property market, needs the capital after Irish banks stepped away from providing development finance during the crash. To some, saying that is evidence of timidity. To others, it is simply stating a fact.

“Housing should never have been left to the marketplace,” he said. “It is the mad speculative money that is destroying our country, which we are welcoming, [but] which we shouldn’t be,” he said, spitting out “speculative” as if the word was as astringent as it is loaded.

He probably is correct that housing should never have been left solely to the market. The Government should have been mass-building public housing schemes years ago, although, in fairness, Ireland was effectively broke until about 2015. But certainly the Government was slow to begin after that.

But while there is plenty of evidence that international capital is making huge money in Ireland, there is little to suggest it is “destroying” the country, as Higgins stated. Without evidence, it is just anti-capitalist dogma. Also, it will cost more than €10 billion per year to build more than 30,000 houses annually. That money has to come from somewhere. Why urge the State to reject international capital? It makes no sense, unless you want the next two or three generations to die in hock with public borrowings.

Higgins has long embraced flawed economics. The kind of stuff that is superficially popular, but lacking any real substance. It is why he revered people like Fidel Castro, whose economic policies had a cost in repression; and Julius Nyerere of Tanzania, a socialist who almost bankrupted it in the 1970s and 1980s.

The president expressed his concerns over inflation in a speech to Siptu in Sligo in March. But yet he never mentioned the fact that some of the inflation we are now seeing is because of central banks printing free money to (through the backdoor) fund the public spending that he always covets.

Do not confuse any of this as excessive sympathy for Government politicians. They will get over it. Some people may fret about the neutrality of his office, but I think there is something refreshing seeing a feisty 81-year-old man keeping Ministers on their toes. It does the country no real harm, because Higgins has little real power beyond his voice.

But that doesn’t mean we should unquestioningly swallow everything he says. Higgins is a poet, but governance is prose. Fixing more than a quarter of a century of wildly fluctuating housing policies is a hard, messy job. I don’t believe there is any easy fix. And I don’t listen to anyone who says there is one.