Is Dan in denial?

Dan O’Brien, the renowned economist, insists that there is no cost-of-living crisis. He is not arguing against the reality that the cost of living has gone up and is likely to keep doing so in the months ahead. His argument is that this does not constitute a crisis.
If enough people say there is a cost-of-living crisis and no one pushes back against this mantra, then most people accept it as a fact, whatever the economic reality. Dan’s contrary attitude does merit some objective reflection. It is undeniable that there are cohorts in Irish society who find it increasingly difficult to make ends meet. Low-income families and individuals, especially, are under economic pressure. That, however, is not a new phenomenon and does not necessarily justify the claims that we are in a cost-of-living crisis. Unlike the situation four years ago, when, in the midst of the Covid-19 pandemic, prices and living costs increased by up to 25 per cent in some cases, annualised Irish inflation to July 2026 was 3.4 per cent. Similarly, the CSO’s Consumer Price Index calculated an annualised increase up to last July of 3.4 per cent. These increases are challenging for consumers, but they hardly constitute a crisis, certainly compared to an inflation rate in 1981 in excess of 20 per cent!

Extreme difficulty?

Presumably, if the general population were experiencing extreme difficulty meeting their day-to-day living expenses, those millions upon millions of savings in individual bank deposits would be decreasing. The opposite is the case. Savings are continuing to increase annually. Likewise, if a majority of people were experiencing severe economic pressures, discretionary spending would be falling off a cliff. The numbers of Irish people taking international leisure flights would be down. They are not. Croke Park would not have sold out in a few minutes for the Katie Taylor fight. Electric Picnic would have seen far reduced attendance numbers, or, at least, given those tickets were purchased 12 months ago, there would be a slow uptake of tickets for next year’s gig in Laois. Likewise, the planned Slane Castle concert for June 2027 would not have sold out within an hour of going on sale. In fact, such was the demand for the standing-room-only tickets, costing more than €100 a pop, that a second concert with the Fontaines DC headliners was immediately organised for the following day. Hardly concrete evidence of a cost-of-living crisis?

Bandwagoning

While Dan O’Brien uses far more sophisticated methodologies to argue against this cost-of-living crisis, these mundane, everyday-spending trends among many thousands of Irish people do seem to corroborate Dan’s insistence that we are not in the midst of a crisis. Even the tánaiste has leapt on the crisis bandwagon. We are, he insists, in the middle of the worst fuel crisis the world has ever seen. He is obviously too young to remember the oil crisis of 1973-74. Now, that was a crisis. Oil prices quadrupled, and there were long queues and fuel rationing at petrol stations as the OPEC members reduced supply to squeeze consumers into coughing up more for their petrol and diesel. Yes, fuel prices have risen, but not at stratospheric levels of historically unseen proportions. Language such as that used by the tánaiste is unhelpful and only fuels the cost-of-living crisis fallacy. As a footnote to the aforementioned crisis, the Government of the day attempted to soften the impact on Irish consumers through subsidies and increased public spending. That ultimately led to the Irish economy suffering a decades-long recession, with mass unemployment, unsustainable public debt, high-double-digit interest rates and a collapse in public expenditure. History never repeats itself, so nothing to worry about!