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Book Review: ‘Crack-Up Capitalism: Market Radicals and the Dream of a World Without Democracy’, by Quinn Slobodian

Recently reviewed here, Martin Wolf’s The Crisis of Democratic Capitalism charts the symbiotic rise of capitalism and democracy, despite their being in tension with each other. Of course, capitalism can and does exist in the absence of universal suffrage. It always has.

*** A version of this book review was first published in The Irish Times on 17 May 2023 ***

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Is a profit-price spiral driving inflation?

Inflation really started to pick up in the second half of 2021. Coming out of the pandemic, as the economy recovered, demand and supply were out of whack. Buoyed by pandemic-era government supports, but still cautious – or restricted! – in going to pubs or restaurants or consuming any services that require close human contact, we were still buying more stuff. Replicated the world over, this meant relatively high demand for goods and snarled supply chains. This caused prices to rise.

In early 2022, Russia invaded Ukraine, sending oil and gas prices through the roof. This quickly fed through to higher energy prices, at the pump and in our electricity bills. More slowly, it fed through to higher prices for everything that uses energy as an input. That is to say, almost everything. The annual inflation rate seems to have peaked at 9.2% in October 2022, and was expected to fall throughout 2023 as interest rate increases sapped demand and dampened prices. After prices spiked by 1.6% in February alone, only modest progress has been made so far, with annual inflation still at 8.5% as of last month. Still, in the absence of further energy shocks, the expectation is that inflation will moderate as the year progresses.

*** This article was first published at on 27 March 2023 ***

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Interest Rates to Continue Marching Higher

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 on 26 October 2022 ***

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Book review: ´How to Stop Fascism´ by Paul Mason

January 6th, 2021, will go down in history as a day of infamy. Although Trump supporters’ storming of the US Capitol doesn’t make its first appearance until a few dozen pages into How to Stop Fascism, author Paul Mason flags it as a “potentially historic turning point”. It is proof positive that leading liberal democracies are set for a fascist turn.

Correctly, Mason draws a sharp distinction between the populist far right and overt fascists. Trump is presented not as a fascist himself, but rather as an enabler, a “useful idiot”. Indeed, explicitly fascist parties are thin on the ground. Greece’s now-outlawed Golden Dawn is a notable exception, although fascist revivalism has been making its mark in both Italy and Spain of late.

*** A version of this book review was first published in The Irish Times on 29 August 2021 ***

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We need to stop the creeping Amazon-ification of our economy

Time will tell whether our post-pandemic economy really takes off like a rocket… and whether a rising rocket lifts all spaceships.

With a wholesale switch from bricks-and-mortar retail to online shopping accelerated by Covid-19, internet behemoths like Amazon have been among the big winners over the past year. While we´ve all been stuck at home, many of us have been lucky enough to have disposable income, but nowhere to spend it. A one-click purchase and a package swiftly delivered to your door can be quick thrill, a small luxury, or sometimes even an urgent need.

Something else that took off in a rocket this summer is Jeff Bezos, Amazon´s founder, world´s richest man, and plausible Lex Luthor super-villain impersonator. Worth more than $200bn, or about half of Irish GDP, he ploughs a reputed $1bn a year into Blue Origin, his hobbyhorse outfit aiming to bring space tourism to the masses. Well, at least to the super rich. On 20th July, shortly after stepping down as CEO, Bezos boarded Blue Origin´s first manned space flight.

*** This article was first published at on 20 July 2021 ***

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Stop the games, tax the speculators

Who had heard of GameStop a month ago other than committed gamers and punters on the stock market? The bricks-and-mortar computer game retailer burst to prominence in recent weeks as a pawn in a supposed David-and-Goliath story, a battle of wits between plucky nerds and the wolves of Wall Street.

Spotting a chink in a hedge fund´s armour, small investors organized themselves through a small corner of social media, a reddit bearing the fitting moniker #WallStreetBets. Basically, the hedge fund had reached the not-unreasonable conclusion that computer game shops were going the way of Xtra-Vision. They borrowed shares in GameStop and sold them, hoping to buy them back at a lower price before returning them to their original owner and pocketing the difference.

*** This article was first published at on 7 February 2021 *** Continue reading

Putting Community First

Together with the state and markets, community is the sometimes-overlooked ‘third pillar’ on which our society rests. Just as we need a strong state and can benefit from efficient markets, these imperatives must be balanced with the interests of the geographic communities that bind us. This is the premise of an important new book by Raghuram Rajan, former IMF Chief Economist.

In Ireland, public policy in recent decades has tended towards letting the market rip. To reduce the resulting stark income inequalities, the state has to do more heavy lifting in terms of redistribution than in any other OECD country. Even then, we only rank towards the middle of the equality league table.

Ironically, perhaps, for a country with such a strong traditional sense of community, local government is an area where we are weak. Ireland has one of the most centralized systems of governance, our local representatives lacking much in the way of real power. Whether it is rural heartlands losing pubs, post offices and people, or pockets of urban disadvantage ravaged by unemployment and drug barons’ turf wars, our communities suffer the consequences, fraying the very fabric of our society. Continue reading

Unemployment is down again but we shouldn’t be complacent

THE IRISH ECONOMY continued to create jobs at a rate of more than 1,000 per week in the three months immediately following June’s shock Brexit vote, defying some of the most pessimistic predictions about the short-term impact.

According to Tuesday’s figures from the Central Statistics Office, 57,500 jobs were created this year to the end of September, signalling robust annual job growth of 2.9%.

The pace of job growth moderated slightly to a seasonally adjusted 13,500 during the most recent three month period, down from 18,900 and 16,100 in each of the first two quarters of the year, respectively. This brought the total number employed to 2,040,500, the highest since the end of 2008, although still 6% below the all-time high of 2,169,600, reached in Q3 2007.

*** This article was first published on on 23 November, 2016 *** Continue reading

Escape Velocity

Nearly three years after losing access to the sovereign bond market, Ireland appears to have built sufficient momentum to escape the troika’s orbit. Come early 2014, the country will no longer be subject to its quarterly visits and binding targets. The government will have succeeded in its number one political objective: ‘regaining our economic sovereignty’. But, what will really change?

When Ireland was first bailed out, I and many others thought it unlikely that the country could succeed in regaining market access by end-2013. In mid-2011, with interest rates on Irish government bonds soaring into double digits, such a benign scenario looked ever more remote.

Then, things changed. Increasingly, Ireland came to be seen as a special case, different from the struggling ‘Club Med’ countries. Irish bond yields fell dramatically, decoupling from those of Greece and Portugal. New ECB President Mario Draghi signalled that he was willing to do ‘whatever it takes’ save the Euro. Ben Bernanke, his American counterpart, kept the printing presses running, doubling down on his so-called ‘quantitative easing’ experiment. No doubt, this ‘easy money’ helped Ireland’s cause. High profile financiers made multi-billion euro bets on Ireland’s recovery story, and are already sitting on massive paper profits. The Irish banks also got in on the act, racking up significant holdings of Irish bonds rather than lending to businesses or households. Internally, economic pain may be manifest, but externally the mood music has been mostly positive. Continue reading

Ireland’s Investment Crisis: Diagnosis and Prescription

I have written in the past about Ireland’s deepening investment crisis. Last week’s CSO figures for Q1 2013 showed that investment had fallen 20% compared to the same quarter in 2012 while the investment rate had fallen to 9.7% of GDP. Here is a paper I wrote on the subject, recently published by the Nevin Economic Research Institute.

In short, a national investment bank focused on infrastructure and SME financing has never been more necessary.

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