Did the warm Winter put a spring in our economic step?

Posted on February 27, 2023 | Leave a comment

What a difference a few weeks makes. Coming into the year, there was doom and gloom about economic prospects for 2023. But, the mood music seems to be changing.

Economic growth is holding up. Inflation continues to trend lower. Job markets remain strong. Energy armageddon was avoided. China’s economy is re-opening after ditching its zero-Covid policy. Forecasters like the IMF and EU Commission are beginning to revise up their predictions for growth this year. And, Ireland is still in a far better position than many European countries.

*** This article was first published at thejournal.ie on 26 February2023 ***

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Posted in Articles for thejournal.ie, Euro, Ireland

Book Review: ‘It’s OK to be Angry About Capitalism’, by Sen. Bernie Sanders, and ‘The Crisis of Democratic Capitalism’, by Martin Wolf

Posted on February 20, 2023 | Leave a comment

People are angry. The failures of capitalism are the cause. The failure of democracy itself could be the result. These are the central themes of two new books, one by US senator Bernie Sanders and the other by Financial Times chief economics commentator Martin Wolf. Sanders is a self-professed democratic socialist; Wolf is a lead contributor to one of the world’s foremost financial periodicals. One might assume they’d agree on very little. One would be wrong.

*** A version of this book review was first published in The Irish Times on 18 February 2023 ***

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Posted in Articles for Irish Times, Book reviews, Euro, Global, Ireland

Book Review: ‘Global Discord: Values and Power in a Fractured World Order’, by Paul Tucker

Posted on January 9, 2023 | Leave a comment

Looking back, the decade between the fall of the Soviet Union and September 11th, 2001, was a time of optimism, even western triumphalism, around the neoliberal “Washington Consensus” and following the culmination of the third wave of democratisation. The United States was the undisputed economic and geopolitical hegemon. Pax Americana reigned. The European Union was expanding and deepening. China was growing strongly, but had yet to come of age as a global power.

*** A version of this book review was first published in The Irish Times on 29 December 2022 ***

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Posted in Articles for Irish Times, Book reviews, Global, Political Risk, United States

Preview: the Irish Economy in 2023

Posted on December 31, 2022 | Leave a comment

The ‘R’ word is being bandied about a lot these days. Is Ireland really headed for recession? And, does it matter?

*** This article was first published at thejournal.ie on 31 December 2022 ***

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Posted in Articles for thejournal.ie, Ireland

Book Review: ‘The Great Famine in Ireland and Britain’s Financial Crisis’, by Charles Read

Posted on December 29, 2022 | Leave a comment

Through lack of understanding of macroeconomics and financial markets, a new UK government turns a fiscal and political challenge into a financial crisis, leading to an austerity-driven humanitarian catastrophe. The year is 1847, not 2022.

This is the core argument of Cambridge historian Charles Read’s The Great Famine in Ireland and Britain’s Financial Crisis. By exploring private correspondence of leading policymakers of the day and highlighting discrepancies with their public statements and historical perceptions, the author interrogates their underlying motivations. In the process, he nails a number of established myths.

*** A version of this book review was first published in The Irish Times on 29 December 2022 ***

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Posted in Articles for Irish Times, Book reviews, Ireland

Brazil is Back

Posted on November 30, 2022 | Leave a comment

The election of Luiz Inácio ‘Lula’ da Silva made for a Red October, and a political comeback for the ages. But, it was a close-run thing, while the second go on the merry-go-round will be far more challenging than the first.

At the fourth time of asking, former trade-union leader Lula was first elected President of Brazil in 2002, and reelected in 2006. Despite initial fears that he may display some of the authoritarian tendencies of Venezuela’s Hugo Chavez, Lula in fact governed successfully from the progressive left, sharing the fruits of economic growth more broadly and lifting 20m Brazilians out of poverty while reducing inflation and government debt. One of his flagship policies, since copied elsewhere, was the conditional cash transfer known as Bolsa Família. This welfare programme channeled cash to poor families on the condition that their children were vaccinated and attended school.

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Posted in Articles for SIPTU's Liberty, Latin America, Political Risk

Rising Interest Rates Risk Italy Being the Epicentre of 2023 Eurozone Crisis

Posted on November 28, 2022 | Leave a comment

There was consternation in Italy recently with The Economist’s characterisation of the British Tory Ominshambles as ‘Br-italy’, because it played into outdated stereotypes. And, with good reason.

Italy has had 68 governments since World War 2, run up massive public debts and regularly resorted to currency devaluation rather than harder-to-do policy reform to maintain competitiveness. Relatively short-lived governments are still the norm, with Giorgia Meloni having recently become the 7th PM in ten years at the head of a Brothers of Italy party that can trace an authentic neo-fascist lineage.

Fiscal profligacy and currency devaluation, however, were very much 20th century phenomena. Italy has been able to respond appropriately with fiscal stimulus to both the global financial crisis and the Covid-19 pandemic, in line with peer countries. But, Eurozone membership has greatly constrained Italian policymakers since the mid-1990s.

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Posted in Articles for SIPTU's Liberty, Euro

Interest Rates to Continue Marching Higher

Posted on October 26, 2022 | Leave a comment

The era of cheap borrowing is over. Households, businesses and governments are all starting to feel the pinch, and things are going to get harder before they get easier.

Having learned the lessons of the global financial crisis, central banks across the world slashed interest rates and flooded financial markets with money as an immediate response to the Covid-19 pandemic in early 2020. Governments spent money like it was going out of fashion in an unprecedented and synchronized global effort to ward off the worst economic effects of the pandemic. On their own terms, these efforts were superbly successful. The Covid recession was mercifully brief and shallow as a result.

*** This article was first published at thejournal.ie on 26 October 2022 ***

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Giveaway Budget Can’t Gloss Over Collapsing Living Standards

Posted on September 28, 2022 | Leave a comment

On the face of it, Budget 2023 was a giveaway of epic proportions. There was something for everyone. Tax cuts, welfare increases, childcare subsidies, reduced student fees, an end to hospital charges and energy cost supports for businesses and households. These were just some of the plethora of attention-grabbing measures announced.

But, what the government appears to have given with one hand, rising prices will more than take away with the other. According to the government’s own economic projections, consumer prices will have increased by 16% between the beginning of 2022 and the end of 2023. Budget measures will help cushion that blow to purchasing power, but for too many people on the margins it won’t be enough. Everyone will feel the pinch, and more people will be pushed into poverty.

*** This article was first published at thejournal.ie on 28 September 2022 ***

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Posted in Articles for thejournal.ie, Ireland

10 Dos and Don’ts ahead of Budget 2023

Posted on September 25, 2022 | Leave a comment

Sometimes good news is bad news. News a month out from your annual budget announcement that the public coffers were brimming with unanticipated largesse was the last thing Paschal Donohue will have wanted to hear. Why?

The natural and understandable inclination of any Irish finance minister, and of the Department at their back, is to be conservative, to guard jealously the public purse strings and to manage downwards the expectations of both colleagues and punters. Someone has to take away the punch bowl before the party gets out of hand. This is an inclination inherited a century ago from His Majesty’s Treasury, the so-called ’Treasury view’.

A year ago, the Irish government was expecting an €8.3bn for 2022. As things stand now, we are on course for the largest annual surplus since at least 2006, largely due to gravity-defying corporation tax receipts.

*** This article was first published at thejournal.ie on 25 September 2022 ***

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Posted in Articles for thejournal.ie, Ireland