Thursday , July 18 2019
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Short Ireland?

Summary:
Outgoing Treasury Secretary Gabs Makhlouf will be picking up the reins at the Irish central bank.Chris Hutching called me for comment about it; after a wide-ranging chat, I'd sent through a potentially quotable-quote that wasn't picked up in the final piece (above-linked). I'll share it here instead. “Secretary Makhlouf is best known for advancing Treasury’s “wellbeing” approach to economic analysis. There is some merit to that approach: economic analysis always should take a very broad approach in considering costs and benefits. But successful implementation of the approach requires a depth of competence in economic analysis. That depth has eroded substantially during Makhlouf’s tenure. Treasury shed competent senior economists and hired junior analysts who often had little or no

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Outgoing Treasury Secretary Gabs Makhlouf will be picking up the reins at the Irish central bank.

Chris Hutching called me for comment about it; after a wide-ranging chat, I'd sent through a potentially quotable-quote that wasn't picked up in the final piece (above-linked). I'll share it here instead.

“Secretary Makhlouf is best known for advancing Treasury’s “wellbeing” approach to economic analysis. There is some merit to that approach: economic analysis always should take a very broad approach in considering costs and benefits. But successful implementation of the approach requires a depth of competence in economic analysis. That depth has eroded substantially during Makhlouf’s tenure. Treasury shed competent senior economists and hired junior analysts who often had little or no training in economics. Makhlouf’s real legacy is not the wellbeing agenda; it is rather a severely weakened Treasury.”
Hutching cites the Treasury card game - I'd given it more as example of the woolier side of wellbeing at Treasury, and where things risk heading with the erosion of economic competence there. I'd referred to the plethora of wellbeing indicators in the wellbeing framework as potentially providing too many analyst degrees of freedom; I don't know how many feelings are in the card game.

We're what, six weeks or so away from the next Treasury CE needing to be in place? Nobody seems to know anything about the next appointee; I understand it is not normal for this not to be known by now.

I take it as a good sign though. The most simplest explanation is that the appointment process has been delayed or reconsidered relatively late in the game. And I expect that to be more likely to have happened for good reasons than for bad reasons. Treasury needs a very strong appointment.

It's an interesting appointment for Ireland though. Secretary Makhlouf has an undergraduate degree in Economics and a Masters in Industrial Relations. A strong background in monetary economics may matter less at Central Banks that are under the ECB; Ireland has had some history suggesting prudential bank regulation may there be of greater importance. And Treasury here has done more thinking about that than you might expect.

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