Category Archives: Articles for SIPTU’s Liberty

Occupy White House

Posted on November 1, 2011 | Leave a comment

When Barack Obama was elected on a wave of euphoria three years ago this month, the US was in the grip of its deepest recession since the 1930’s.

Times were tough, but when the silver-tongued President-elect spoke of hope and change, of America as a place where all things were possible, he spoke to the American dream. People wanted to believe.

After three years of economic pain and political bickering, Americans are angry and frustrated. They have lost faith in their political class. For the first time in living memory the American dream itself is being called into question. People are no longer so sure that if they work hard and save hard, they will be able to provide a secure future for their children. Continue reading →

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Posted in Articles for SIPTU's Liberty, United States

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Can the euro be saved?

Posted on September 30, 2011 | Leave a comment

Yes, it can.

The real question is whether there is a coalition of the willing to move beyond rhetoric and do what it takes. A related question is whether those with the power to save the euro have the democratic mandate to do so.

Events this summer laid to rest any remaining doubts that the European monetary model is flawed, and ultimately unsustainable in its current form. 

There is a broadening consensus forming around the need for deeper economic and fiscal integration to steady the ship. ‘Eurobonds’ have been the rallying call of the left as a means of effectively cross-subsidising weaker eurozone members, and there is certainly much of merit in this idea. ‘More Europe’ may be part of the answer. Continue reading →

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Posted in Articles for SIPTU's Liberty, Euro

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Lessons for Ireland from Obama’s Jobs Plan

Posted on September 26, 2011 | Leave a comment

Barack Obama knows that his 2012 re-election chances may hinge on his ability to tackle unemployment which has remained stubbornly above 9%. With the US purse strings in the vice-grip of a US Congress controlled by a Republican Party with a deficit fetish, he knows better than to expect help from this quarter.

If more fiscal stimulus is impossible, whether because of real funding constraints, as in Ireland, or because of purely political constraints, as in the US, then the next best approach is to get more bang from the government buck. It is this concept, formally known as the ‘balanced budget multiplier’, that underpins President Obama’s latest jobs plan. Continue reading →

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Posted in Articles for SIPTU's Liberty, Ireland, Uncategorized, United States

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The Transatlantic Economy’s Summer of Discontent

Posted on August 26, 2011 | Leave a comment

Much of the orthodox analysis of the West’s recent economic travails puts the blame squarely on a failure of political leadership.

Reality requires a more complex narrative.

Yes, the US came inexcusably close to committing hari kari by failing to lift its debt ceiling with a balanced, timely, comprehensive programme for long term fiscal sustainability.

Yes, the European Union struggles to deal with the fallout from the inherent contradictions at the heart of its monetary union.

Certainly, political failure doesn’t help lift the pervading sense of crisis, and the uncertainty it breeds contributes to financial market volatility, but it is market failure, not political failure, that is at the root of our economic malaise.

In short, the West’s growth model is broken. Continue reading →

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Posted in Articles for SIPTU's Liberty, Euro, United States

Is Default the Default Option?

Posted on July 12, 2011 | Leave a comment

Sovereign default is a political choice. There is no specific tipping point where a country’s debt becomes economically unsustainable, and default inevitable.

Market perception of default risk, as measured by the interest rate charged, is determined by a country’s track record in servicing its debts as well as by the size of its debt, the size of its economy, and the rate at which both are growing.

Unlike people, countries never repay their debts; they just roll them over.  In this way, a country can theoretically support a very large national debt, so long as the bond market is willing to lend at a manageable interest rate. Continue reading →

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Posted in Articles for SIPTU's Liberty, Ireland