Sweating the small stuff is our speciality

Others object to alleged inefficiencies at Irish Water: “management is paid too much”; “staff bonuses are given out too easily”; and “Irish Water shouldn’t have simply taken on all of the county council staff previously employed providing water services”. Charges of inefficiency can be levelled against every organisation in the country. Should we be freed from the burden to pay taxes because we have reservations over how Enda Kenny and Joan Burton run the country?

These latter arguments all fall under that great Irish rhetorical umbrella: “I don’t mind what you’re doing, it’s the way you’re doing it.” What this really means is: “I do mind what you’re doing but I lack the clarity to say that, and will whinge instead about the way you’re doing it.” It is characteristic of our frequent inability to think or to talk straight.

Characteristic of such intellectual confusion is the stance of the newly formed Social Democrats on the water charges.

This party supports “the Nordic model of social democracy” but none of its TDs was willing to admit to paying the water charges. One of them, Stephen Donnelly, seemed initially unsure as to whether his family was or wasn’t paying its charges. He wants to run the national finances but is seemingly unaware of key details of his family’s finances.

Only in the Alice-in-Wonderland realm of politics could the conduct of the Social Democrats in this matter be judged sensible and wise.

Public fixation on water charges is odd for a number of reasons. The amount of money involved is small, relative to what other levies and taxes raise. The maximum amount we are talking about is the €580m boost the annual public finances would receive if Irish Water were indeed considered a “market corporation”. This is less than 1.4% of the total tax take that the government expects this year. It is very close to the €536m the state would lose if it cut the standard rate of income tax by a measly one percentage point.

The outrage over water charges is reminiscent of the outrage triggered in 1987 over the introduction of a IR£10 licence for rod anglers. It seems that the less important the issue, the more worked up we get. It’s also odd that the furious reaction to water charges erupted after the troika of the IMF, ECB and EU had left town and after Ireland had already swallowed the bulk of austerity medicine.

When substantial public protest might have put a halt to the troika’s gallop, it was absent. But once the troika was gone, protests erupted. Is this a delayed yelp of pain at the bitter path of austerity we have had to navigate? A form of PTSD (Post-Troika-Stress-Disorder)? The fuss over water charges — something the average person can do little about — stands in sharp contrast to the silence over Ireland’s growing problem of obesity, something wholly under individuals’ control. Professor Donal O’Shea, head of weight management services at St Columcille’s and St Vincent’s hospitals and co-chairman of the Royal College of Physicians of Ireland policy group on obesity, recently said that the HSE is struggling to cope with obesity and its impact.

Nearly all Irish adults are likely to be overweight in 15 years, according to a new study that warns of a European “obesity crisis of enormous proportions”.

On current trends, 89% of Irish men are expected to be overweight by 2030, and nearly half obese. That’s a rise from 74% overweight, with 26% of those obese, in 2010. Turning to Irish women, 85% are forecast to be overweight and 57% obese by 2030, also well ahead of the 2010 figures. This data indicates that we are on course to be Europe’s fattest nation.

The societal costs of so many people being overweight and obese are immense. Management consultancy McKinsey, a former employer of Stephen Donnelly, reports that “obesity is responsible for about 5% of all deaths a year worldwide, and its global economic impact amounts to roughly $2 trillion annually, or 2.8% of global GDP — nearly equivalent to the global impact of smoking or of armed violence, war, and terrorism”.

McKinsey concluded: “No single solution creates sufficient impact to reverse obesity; only a comprehensive, systemic program of multiple interventions is likely to be effective.” It estimated that if the UK deployed the interventions it suggests, it could reverse rising obesity and bring about 20% of overweight and obese individuals to the normal weight category within 5-10 years. This would have an estimated economic benefit of about $25bn (€22.6bn) a year, including a saving of about $1.2bn a year for Britain's health service.

If Ireland made similar savings proportionate to our population, they would amount to a benefit of €1.6bn for the overall economy and €80m for the HSE. Yet, despite its clear importance, there is hardly any political debate on this matter. We’d rather blame others for relatively minor problems (water charges) than take responsibility ourselves for life-threatening ones (obesity).

The private remedy for obesity is for the overweight to eat less, eat better and to exercise more. Having lost some weight recently I found that eating less contributes more to weight loss than exercising more. Unfortunately, eating less and eating in a disciplined fashion is not a fun activity. One simple public measure that might help (slightly) would be for doctors to quickly measure and inform patients of their body mass index (a rough measure of whether someone is underweight, normal weight, overweight, or obese) at each consultation. The first step to change is awareness.

PS: Renminbi is the name of the currency introduced by the People’s Republic of China when foudned in 1949. It means “the people’s currency”. Yuan is the name of a unit of the currency. Whether one calls it the renminbi or the yuan, what significance does China’s decision to let market forces affect its currency have for Ireland?

For many years now, there has been a significant number of members of the US Congress who argue that China has won an unfair trade advantage as its currency — and thus its exports — is priced too cheap. For them, China has been “a currency manipulator” and should therefore be punished with trade sanctions.

But, whatever the situation over the past decade, China has seen its currency rise in relative terms over the past year. Several currencies have experienced sharp drops against the dollar in the face of persistent deflationary pressures: sterling has dropped nearly 10%; the euro and the Australian dollar have dropped nearly 20%; and the Brazilian real is down 35%. While all these countries’ currencies were falling — and their exporters got a relative price advantage — China’s currency held steady against the dollar.

Until last week. Not only must China’s masters confront increasing competition from abroad but they also face a domestic economy that is rapidly slowing down. It is those dual pressures that most probably prompted the change in Chinese currency policy. The implication for the global economy is that deflationary pressures in China must be greater than previously thought. Ratings agency Moody’s reflected that the range and size of measures introduced by Beijing “has been broader and larger than we expected” and concluded that China “is weaker than we previously assessed”. Stephen King, outgoing chief economist of HSBC, said that China had acted as a “shock absorber for the global economy, a punchbag seemingly able to soak up the recessionary blows that would otherwise have totally derailed global growth”.

China’s reflationary interventions had triggered an overheated property market, a build-up in debt, and a bubble in stock prices. The worrying conclusion for an over-indebted world is China is now abandoning its reflationary role and may follow the eurozone and several emerging markets down the competitive devaluation route. Might an all-out currency war follow?