Two weeks ago this column examined the Government’s proposed Housing for All initiative. One of the significant positives is an undertaking to prevent “flipping” of sites after planning permission is acquired.
Flipping is a process whereby someone buys non-zoned land and then makes the right noises to the council about what could be done with the site in the public interest, such as how many homes could be built on it and the like. Once the zoning is acquired, the value of the land rockets. But rather than carry out the building, the land speculator sells the land on to another developer and trousers the difference in the land value.
What was Sally Rooney’s crime? The more she writes, the more her books sell, the more incoming fire she seems to take from reviewers, opinion-makers and various salon arbiters of literary standards.
Could it be that she is the author of choice for many, writing novels with characters and experiences that readers bond with, and that annoy critics? Could it be that she’s simply a better writer than some of the reviewers who have decided she needs to be taken down a peg or two?
If you are looking to buy a home and are only being offered dilapidated, third-rate places in parts of town you’ve never wanted to live in, you should get out of the market and wait.
Until the huge supply promised by the Government’s “Housing for All” initiative comes on stream, leaving this dysfunctional market is the only rational reaction to a comprehensive national housing plan. The State is in effect advising buyers to wait, as we will be coming down with apartments, rental properties, family homes, duplexes and maisonettes, with more options for buyers and renters in the coming years.
As I’ve been working from home for the past 20 years, never truly having a “real job”, trying things, some of which work, some of which fail, the pandemic has not dramatically changed the way I live. That slightly precarious, gig-by-gig, skin-in-the-game existence, which many people fear, is normal for me. I can’t imagine living any other way.
In the future, this slightly blurred lifestyle, where the line between work and play is ambiguous, looks likely to become a reality for more people. Some call it “the gig economy”; others might prefer to call it “living a sovereign life”, where you can have more control over your own affairs.
An unexpected consequence of Brexit has been the dramatic increase in trade between the Republic and the North. In the past six months, trade has increased by €800 million, as supply chains adapt to the new realities.
Unlike politics, commerce does not see flags, slogans or borders. The merchant has always favoured cosmopolitanism over nationalism, money over votes, flexibility over regulations and freedom of expression over dogma.
Standing in the west of Ireland, almost flattened by gale force winds, peering out through the horizontal rain at those enormous Atlantic waves crashing ashore, don’t lament your sodden staycation, rather consider this: you are experiencing the future wealth of the country.
In the 21st century, Ireland is to renewable energy what 20th century Saudi Arabia was to fossil fuels. The only difference is that unlike the Gulf States, where oil will run out, our energy sources will not deplete. Our island’s wind, wave and tidal potential in generating renewable energy, is unparalleled.
In the past couple of days, a row has broken out between Minister for Transport and Green leader Eamon Ryan and Eamonn O’Reilly, the public servant who runs Dublin Port. It’s a turf war in essence.
Ryan, as Minister and a TD for some of the area covered by the port, leads the party committed to higher density and more environmentally sustainable living, and he wants to set aside vacant but highly valuable land on the Poolbeg peninsula for housing. O’Reilly, meanwhile, wants to expand the port’s capacity without moving.
Demography is destiny” is a phrase said to have been coined by the French philosopher August Comte. The Irish people, perhaps more than most, should appreciate the significance of this expression. After all, no European country, possibly no modern country, has experienced as traumatic a demographic pattern since 1840.
With the island’s population only just moving back towards the eight million recorded in the early 1840s, Ireland’s 200-year experience is a source of fascination for demographers. Yet our experience of falling population is about to be copied all over the world, albeit under very different circumstances.
Having originally scoffed at it as an empty “woke” gesture, the UK’s Tory government then scrambled to back the English football team “taking the knee”. This is a fine example of a brand trying to get back on the right side of public opinion. It turns out that the majority of English people – and particularly the young – agree with Marcus Rashford, who is a far more potent adversary to Boris Johnson than Keir Starmer.
Like all brands, the Tories live and die in the court of public opinion, and public opinion shifts. Just ask Fianna Fáil. Being on the right side of these cultural swings is essential for any brand.
In January 1988, the Economist magazine carried a special report on Ireland entitled “The poorest of the rich”. Our economy was in a tailspin. Emigration was skyrocketing, we had just devalued the currency for the fourth time in a decade and the country was flirting with a debt crisis.
Capital and talent continued to flow out of the country, leaving a fragile shell of vulnerable local companies and a bloated public service, undermined by a current account deficit. In short, a basket case.
One of the great mysteries in economic history is why large parts of Africa and Latin America do not speak Chinese but rather English, Spanish, Portuguese or French.
In 1492, when three rudimentary Spanish vessels alighted in what is now the Dominican Republic, the Chinese navy dwarfed the combined sailing infrastructure of competing European kingdoms. Technologically, China was miles ahead of Europe, with gunpowder, watches, paper money and a whole host of other innovations, created and honed over centuries. These innovations beguiled Marco Polo.
When it comes to foreign politics, we tend to get hot under the collar about events in the UK and the US. Yet in terms of the impact on Ireland and Irish policy, events in Germany are more material. We are on the path to closer EU integration, and Germany is the dominant country, so Germany counts now more than ever.
The Merkel era is over – a new Germany is recalibrating. What sort of Germany will we get?
To understand the grip that property ownership has on Irish people, it is reasonable to start with history, group psychology and sociology. The chapter on the concept of home in President Michael D Higgins’ book Recapturing the European Street is an excellent place to start.
With great erudition and learning, the President traces our relationship with the notion of home, the legacy of national dispossession, the emergence of the Land League and the centrality of land ownership to the Irish national project. The chapter glides effortlessly through different European philosophical ideas of home, particularly both the German and French strains, before landing back here, in our Irish home.
Economics is counterintuitive – and maybe this is the most important lesson in macroeconomics. Here’s a good example. A responsible household will try to save but the economy is not a household. When everyone in the economy saves at the same time, it may look good and responsible from an individual perspective but, if everyone is saving, who is spending? Since your spending is my income, if you are not spending, where is my income going to come from? And as savings flow from income, if my income is falling so too are my savings, thus everyone saving at the same time leads to a fall rather than an increase in savings.
When so-called “serious” people call for general belt-tightening, urging people to save and not spend, it sounds parsimonious – and in modern economics we’ve fetishised parsimoniousness – but it’s actually silly. What seems like common sense isn’t sensible at all.
The difficulty lies not so much in developing new ideas as in escaping from old ones — John Maynard Keynes.
This week, the Irish Fiscal Advisory Council has shown it is wedded to old ideas by trying to bully the State into cutting spending and raising taxes. Meanwhile, the world is moving into an era of greater government spending, backed to the hilt by new central bank financing, in order to fix infrastructure.
Our world is terrorised by short-term thinking. We are living longer but thinking shorter. So many aspects of our lives are now governed by instant gratification from Insta likes to Twitter notification on our mobile devices. TikTok thinks YouTube isn’t short enough.
In our working world, people expect emails will be answered immediately. WhatsApp groups bark for attention. Amazon urges us to “Buy now”. Netflix tracks our habits, reminding us of the next “must watch” mini-series. We are increasingly out of breath. In business, chief executives are obsessed by quarterly results. Shareholder value demands immediate profit. In the financial markets, Bitcoin surges and then collapses, driven in part by the oppressiveness of nanosecond algorithm trading.
The other night I was watching an episode of Parts Unknown in which Debbie Harry is chatting to Anthony Bourdain. Although they didn’t address it directly, they alluded to the long term cultural consequences of the unaffordability of housing in New York.
It reminded me of Bourdain’s descriptions in his memoir Kitchen Confidential of the people who work in the heat, sweat and electrifying atmosphere of a busy kitchen:
After years of hard slog, failed experiments, dry runs, tinkering around and enormous effort, an American medical researcher, Jonas Salk, developed the first safe vaccine for polio in 1955. A brutal, highly contagious disease, polio attacks the central nervous system and can cause deformity, particularly to the legs. It was a common killer in Ireland and around the world.
Salk, a fascinating character who married Françoise Gilot, a muse and mistress of Picasso, could have been made fantastically wealthy by his discovery, but he chose to give away the patent rather than cash in. The polio vaccine was given out for free to millions, saving countless people. In later life, Salk was asked why he chose not to profit from his breakthrough. He responded that his philosophy in life was to be “a good ancestor”.
We are in the middle of an epidemic of the “serial objector” virus; the system is on the verge of collapse, with serious – almost unquantifiable – long-term consequences for the future economic health of the nation. Every time there is an objection to a housing development, the cost of housing rises, the housing crisis deepens, and one more young person’s life is blighted by the entitlement of someone else, usually an older person.
Although a worldwide condition, the Irish variant of the “serial objector” virus is particularly virulent. A recent report suggested that the number of housing units in Strategic Housing Developments that have been stalled or blocked by judicial reviews in Dublin last year jumped by more than 1,000 per cent.
Imagine the messages in the self-congratulatory, encrypted WhatsApp group of the bankers, football club owners, lawyers and their key management on Sunday night as they announced their intention to stitch up football for unfeasible personal gain.
Man Utd is typing …
Liverpool is typing …
By Tuesday the WhatsApp group was still giddy.
A keen language student back in 1990, I arrived in the village of Stari Ruza, 50 odd miles west of Moscow. Near Borodino, where Napoleon’s republican advance was halted by Russian forces, the last westerners seen in the village were Hitler’s retreating army in 1942.
The local babushkas, intrigued by the arrival of this red-haired foreigner, referred to me as Gitler. Yes, that’s me, Hitler, pronounced with the Russian inverting “g” for “h”. The grannies hadn’t seen foreigners since 1942 and apparently the last Nazis in Stari Ruza, teenagers from the Rhineland, had red hair. Who doesn’t put two and two together?
The majority of older Irish people who died of Covid-19 probably died in England. When it comes to fewer deaths from Covid-19, our reasonably good outcomes may have less to do with lockdown and more to do with the echo of emigration.
The huge proportion of older Irish people living in England is a function of the massive emigration to England in the 1950s and 1960s. In the 1950s, half a million people left for England and in the 1960s another 300,000 followed them. There is scarcely a family in Ireland without an old uncle or aunt in Coventry, Manchester or London.
The Irish housing market has hit peak dysfunction. Stay away. The fourth quarter of 2020 saw the lowest level of supply of homes for purchase since 2006. In Dublin, supply was down 21 per cent last December relative to the same time the previous year, with just 3,400 homes listed and prices up 7.2 per cent over the same period.
In the Connacht-Ulster market these trends are more severe, with supply down 30 per cent over the year to December and prices up 8.8 per cent. In December there were just 15,390 properties listed for sale on Daft.ie – down about one third from an already low level a year earlier and well below the average 40,000 properties listed annually over the past 13 years.
There is a monetary revolution happening right under our noses. It is of such seismic proportions that the insurrection will force the EU to make a choice: either it accepts that in the future the ECB will continue to finance everything as it is doing right now, or it will try to go back to the past, reasserting Maastricht Treaty ideology on austerity and government deficits.
The latter option would mean the ECB will blow its own currency apart in a violent, self-inflicted crisis, which would see billions of euro leaving Italy, Spain and Greece in the biggest synchronised current account crisis the world has seen.
The Davy debacle has many angles, most of them unsavoury. One, not being adequately investigated, is the effect on an economy that attracts bright people into sectors that exist to extract fees rather than sectors that produce things.
The fee-extracting economy, known as the rentier economy, is one that rewards people who don’t produce anything but extract fees from property (physical or intellectual) while operating under licences. In contrast, the productive sector is the part of the economy where people make things, innovate, add value and sell new products in the market.
This St Patrick’s Day, the Taoiseach should ask US president Joe Biden for help. What about asking him for four million vaccines? In a sign of solidarity with its oldest ally and the homeland of more than 30 million Irish-Americans, the US could exercise its ample soft-power and help a friend in need.
Vaccines save lives, and saving citizens’ lives is the primary responsibility of any state. We can’t get our hands on enough vaccines via the EU’s centralised scheme, but we have the option to look elsewhere.
It may be difficult to imagine but there are significant grounds to believe that the economy will recover quickly from this trauma, and there are strong reasons to be optimistic that the eye-watering budget deficit, a cause of concern to many, will narrow, on its own, with no need for austerity.
Structural trends in our society as we adapt to new ways of working will enhance productivity, because of the end of the enforced commute. From a productivity point of view, commuting is dead time and dead time is dead money. This, too, will change.
Planning for housing based on national population dynamics is one of the most basic functions of economic policy in any country. More people means more homes delivered at stable prices, built by a healthy, innovative construction industry, using the most up-to-date techniques to meet whatever communal and societal standards are expected without requiring long commutes.
This is what proper countries do. On this score, Ireland is the dunce of Europe. We build in the wrong places, at the wrong price, at the wrong time, driven by the interests of landowners and banks, leading to booms and slumps, bankruptcies, ghost estates and now hundreds of thousands of citizens priced out of a pathetically dysfunctional market. This has to stop.
If coronavirus eventually recedes as we all hope, public health will be gradually elbowed out by public housing as the number one issue facing our economy.
A year ago this week, an election was fought more or less on the issue of housing. Sinn Féin did exceptionally well in that ballot, not least because it created the perception that it cared more than others about the anxieties of younger people.
We need to take a breath regarding the “end of the city” narrative. It takes quite a bit to finish off a city. Berlin was reduced to rubble, yet it rose again. If carpet bombing couldn’t destroy the German capital, Covid-19 and Zoom will not finish off Dublin, although their impact on the city will be profound.
Change happens when technology and culture move in the same direction. Technological change is never enough to drive social change. It is necessary but not sufficient. There needs to be cultural buy-in too.
The annual hullabaloo about RTÉ presenters’ salaries focuses attention on the licence fee. In this system, a captured audience is obliged to pay a fee to an organisation, whether it uses the service of not. Irish citizens risk jail if they don’t stump up to pay the salaries of these presenters. It seems quite anachronistic.
Unlike the BBC, RTÉ also raises private advertising revenue. Some justify this fee on grounds of culture, others don’t. Economically, this arrangement is a form of capitalism, “rentier capitalism”, prevalent in Ireland, where anointed organisations are preferred and are allowed to operate in a grey area – half public, half private – where budgets are soft, the market is captured and over-runs are common.
Do you remember when you got your first pair of Doc Martens?
For me, it was 1984, just in time for The Clash at the SFX. With The Clash you knew who was going to turn up but to spice it up, London’s finest were supported by an anarchic Belfast skinhead outfit, The Outcasts, who brought their own crew.
The Jamiroquai frontman look-alike, all buffalo horns and fox pelt, who stormed Washington’s Capitol on Wednesday was the standout character of Trump’s raiding party.
Channelling his inner Daniel Boone, the space cowboy returned to the epicentre of the American republic, vowing to take back control, seize the stolen election and, in true backwoodsman fashion, embody the pioneering spirit that powered the great frontier expansion to the American West.
Could Ireland be in a for a manufacturing renaissance in the coming decade? It might sound optimistic to think of moving manufacturing plants over here, given our high wages and lack of deep manufacturing networks, but only 30 years ago Ireland had no pharmaceutical or tech industry.
Today, due to ongoing multinational investment, we have a generation of local managers schooled in the most up-to-date manufacturing processes. Such management talent is a critical advantage.
When interest rates are low and capital easy to come by, the valuation of assets can be out of kilter. Take Airbnb. Last week it was floated on the US stock market. The company was hoping that the shares might trade at about $60 (€49) a share. This week it was traded at just shy of $140 a share. Twice what the company valued itself at.
Earlier this year, as travel stopped, people in the know suggested that the company should trade below $30 a share. Today this company, which has yet to make a profit, is valued at $85 billion. Remember that behind all the hype, Airbnb can’t make a profit, so how can it have such a huge valuation?
The break-up of the United Kingdom has just accelerated. The DUP, a party that never misses an opportunity to miss an opportunity, has done more to undermine the Union than Sinn Féin.
As leaders of unionism in the north-east of this island, the DUP’s manoeuvring over the past few years has culminated in customs checks between Northern Ireland and Great Britain for the first time since 1801. The English nationalists, otherwise known as Brexiteers, who lectured the world about the merits of buccaneering global free trade unencumbered by meddling Brussels, have ensured that the UK itself is actually a smaller free trade zone than it was before they started. Not only does the UK now have barriers with the EU, but it has barriers with itself. In short, the UK has declared, and successfully prosecuted, a trade war with itself.
One of most significant macroeconomic developments, particularly in Ireland, has been the fall in interest rates over for the past four decades. When it comes to long-term investments, falling interest rates profoundly alter what is possible.
Lower rates will continue as we find ourselves in a monetary union with a continent that doesn’t want to have many children. Yet we are still having babies. Demography is destiny.
Some of the most beautiful and evocative buildings in rural Ireland are stone, narrow steepled Church of Ireland churches. Many are now forlorn, ivy-clad and abandoned.
Some have been deconsecrated and transformed into homes, work spaces, shops or cultural centres. Others struggle on as places of worship for dwindling, elderly populations with rectors driving from service to service on a Sunday, keeping lights on and isolated communities together.
Now that we are looking at the beginning of the end of the pandemic, it is time to assess the likely long-term impact of this experience on the economy. Calling the end of a pandemic is obviously fraught with danger, but at some stage we have to believe in science.
This week, as well as the election in the United States, three major events are crystallising that will profoundly change the economic outlook for 2021.
Anyone who has experienced unemployment or seen it afflict close family or friends knows that it is not just about income, it’s about soul.
Unemployment affects your spirit, sense of worth and can cause feelings of fragility, hurt, sadness and even despair. Such emotional and psychological scars are not easily healed with a weekly government cheque.
Property owners have a duty of care towards their properties. There is such a thing as an appropriate owner and an inappropriate owner. The appropriate owner looks after their property, makes sure it does not fall into disrepair. Such an owner should be encouraged to maintain the property.
If the property is part of our urban heritage, that encouragement should also be accompanied by an equally firm penalty for dereliction to punish the inappropriate owner. The owner of an historic property is a custodian.
My colleague, Fintan O’Toole, deems it “breathtaking” that a group of 11 men, and not a single woman, took the decision to lock down.
Of course he is right. Robust decision-making must be representative. None of the decision makers – all public servants or politicians – works in the sectors that they are closing down.
In the mid-1990s a foreign friend, visiting Dublin for the first time, lamented how malicious the British must have been to bomb the city’s quays, great squares and wide streets before they left.
Looking at the dereliction, beautiful buildings without roofs, gutted internally, their facades crumbling, this visitor concluded that some vindictive scorched-earth policy had resulted in such destitution, and that the poor post-independence Irish simply never had the money to refurbish.
The macroeconomy operates with two arms: the fiscal arm and the monetary arm. It can been seen as a boxer, with a left jab and a right hook.
Fighters go into the ring with a chance of beating their opponent, but if they have one arm tied behind their back against a two-fisted adversary, their chances fall to zero. Same with an economy. If either monetary or fiscal policy is not working, the ability of the economy to stay in the game is drastically diminished.
On Monday night, some 1,000 young people gathered near the Spanish Arch in Galway and were roundly criticised for doing so. But in vilifying them, we forget at our peril that those young people are also Ireland’s future.
They will pay for your retirement and will propel the country forward. They will take the risks, create the companies, music, art and culture of 21st-century Ireland. They will possibly manage and navigate the country towards a United Ireland.
We could be witnessing the beginning of the end of the United Kingdom. The centrifugal forces of competing nationalisms are strong enough to recast the old order and to redesign this part of the world in a way that has not been seen since the Tudor era, when England started its Imperial project in Ireland.
The centre now struggles to hold because nationalism is being driven by the centre. Nationalism is now Whitehall’s default position.
This week, we’ve had so much incoming economic information, it’s hard to know where to start. News that the economy is in a recession confirms what we all knew.
Likewise, Google’s decision, which it came to well before the rout in tech stocks this week, not to take a large office block in Dublin 2 is not such a surprise and is a portent of things to come. As this column argued a few weeks back, commercial property in Dublin and other major tech-focused urban centres, like San Francisco, is in for a torrid time.
While we are still convulsed over Phil Hogan, the EU has moved on. This week, the powerful head of the German Bundesbank, Jens Weidman, sought to reframe the battleground for 2021 and beyond.
The future of Europe will be a struggle between the North and the South and, more specifically, between Germany and Italy, Europe’s two manufacturing powerhouses.
Another lockdown will destroy the economy unless we change direction. It’s really that simple, and it is because the banking system no longer works as a distributor of capital in the country.
Our Government and ECB have approached the crisis in the same way: cutting interest rates to zero to coax businesses to borrow and to encourage banks to lend. As a result, banks are the critical intermediary between the Central Bank, the State and the economy.
During the first great agricultural revolution (10,000 BC to 5,000 BC), when humans moved from being hunter-gatherers to farmers, settling in small villages and ultimately towns, the world human population is estimated to have increased from four million to five million.
In the next 5,000 years, from 5,000 BC to the birth of Christ, the human population is thought to have increased from five million to 100 million. In this second 5,000-year period, the human population increased approximately 25 times whereas in the first 5,000-year period, the increase was marginal. The reason for this disparity is that the earlier five millennia of domestication were the most lethal years in human history.
Pepare for carnage in commercial property. In the past few years investors have piled into the Irish commercial property market, with a particular focus on Dublin. Initially, it was international players but latterly, as is always the case, Irish financial firms have been putting Irish investors’ and pension fund money into the mix, adding to the frenzy.
By the beginning of this year, average annual Dublin rent was €673 per sq m, placing Dublin just above Geneva and Milan but below London, Paris and Zurich. It ranked as the fifth most expensive city in Europe.
In Mickey Bradley’s book Teenage Kicks: My Life as an Undertone, the bass player reveals that without Derry Credit Union, set up by John Hume in 1960, The Undertones might not have happened.
On June 15th, 1978, The Undertones had blagged their way on to the bill of a battle of the bands in Belfast, hosted by the legendary Terri Hooley of Good Vibrations record shop. Belfast was home to Stiff Little Fingers, whom The Undertones had just seen play in Kelly’s of Portrush. SLF had released the highly charged political single Suspect Device under their own record label and had just signed a new deal with the most happening independent label, Rough Trade. For the Derry boys, Belfast was big time.
The Irish summer is hard to love. Walking towards the Twelve Bens, above Roundstone village on the bog road, beaten by torrential rain coming at you sideways, mightn’t be everyone’s idea of the perfect holiday.
In fairness, there’s something comical about paying for such a spiteful drenching. The late July temperature hits a sizzling 13 degrees, away from the wind.
The July stimulus plan announced by the Government this week is a step in the right direction. Expect more because the economic heft needed to lift the economy out of this slump will be hindered by coronavirus.
In normal recessions, the recovery emerges slowly as people become more confident, looking forward instead of backwards. An iterative process, this recovery is a step-by-step movement, like climbing a ladder, looking for the next rung. Confidence builds, one small decision at a time. We edge upwards. True escape velocity is only achieved when consumer spending – 60 per cent of GDP – kicks in. Without consumer spending, there is no recovery.
Whether they be city states or countries, all jurisdictions that experience growth rates and increases in prosperity that, for a time, dwarf those of their neighbours tend to have deployed an innovation, a resource or a policy that gives them a unique economic advantage.
For France, that policy might have been mass and brutal colonialism in Africa. For Holland it could have been the wholesale plunder, at gunpoint, of the natural bounty of Indonesia and Borneo. For Belgium, early 20th-century wealth came with the gruesome hacking-off of the hands of men, women and children in the Congo in order to force the enslaved African population to produce more rubber.
To understand new phenomena, we need new language. Language is critical to our comprehension because language allows us to paint mental pictures. Language is a shortcut and a sort of thought organiser that allows us to see the world with more nuance and depth.
Unfortunately, economics treats language as an afterthought, mangling its beauty and humanity in a grating, mechanical dullness.
“This will be a Government of enterprise, creating new jobs.”
“Creating 200,000 jobs by 2025” [in tourism].
There are 14 separate quotations from the programme for government, all citing something mythical called “job creation”. There is no such thing.
During the week I joined a fascinating webinar given by the brains and policy guru behind the European Central Bank, Philip Lane, its chief economist. He looks like a man with the job he always wanted and is comfortable with it.
The reason I used the term “brains” is very simple: Lane is now the intellectual driver of policy. As I listened to him, I heard a combination of Ben Bernanke’s deep appreciation of monetary history and Mario Draghi’s sharp understanding of the power of the central bank and the breathtaking array of tools at his disposal. Lane grasps what is at stake and is prepared to act comprehensively.
A gerontocracy is a country run by old people or people who are considerably older than the average. Traditional societies (and communist ones) were typically run by the elderly.
For Plato it was obvious that the old would run Athens as they would bring wisdom to decision-making. In contrast, the Roman republic usually vouched for younger men. Later Roman emperors tended to be young not least because being the boss was a dangerous job; many met with premature and nasty deaths.
As the lockdown eases, let’s look to the future with confidence. We should soon have a new government and maybe this will bring new thinking. There is little to fear as the local economy and the global economy open up. While we might have to get used to living with Covid-19 rather than talking about “before” and “after”, it is time for big thinking. The lockdown has given us this opportunity.
By coincidence, the financial markets are presenting the country with a unique opportunity and we must take it.
It is difficult to be confident about the future when our rate of unemployment is 25 per cent, the State’s budget deficit is massive, and geo-politically the streets of the US, our most important investment partner, are in flames. But there are grounds for optimism. If we do the right thing now there is a pathway whereby the economy can recover quickly, and, with political vision, it can be reset to create a more inclusive and ebullient society underpinned by a competitive economy.
At the moment people are traumatised. Trauma tends to shorten time horizons. In a crisis we stop thinking about the future and focus on the here-and-now. Tomorrow becomes today. However, it is important to see beyond this emergency, and appreciate that the economy was vibrant in March. That economy has not died. It remains in “virus-imposed” hibernation. We can waken it.
As the lockdown rules are eased, the economic and political ramifications of the Great Pandession of 2020 are only beginning to take shape. Some people are traumatised by the experience of the past three months while others look to the future with trepidation.
As is the case with most challenges, much hinges on the plan. What is the recovery plan? At the moment, there seems to be none bar the usual murmurs from the austerity jihadis – the old orthodoxy, who don’t seem to realise that the world has changed. We are not in Kansas anymore.
This is not the time for conventional thinking. We are in a pandession. As I wrote recently, a pandession is neither a recession, nor a depression – which are both consequences of economic exuberance. Traditional economic downturns are the wages of inflation.
Such inflation might be exhibited in wages and general prices (as we experienced here in the 1980s after the 1970s inflationary burst) or in house prices (as we experienced here in 2010 after the 2000-2008 credit splurge).
As the world economy remains largely closed down, it is essential to understand what we are experiencing. We are not living through a recession. Nor are we witnessing a depression. We are suffering from something new, something I’d like to term a “Pandession”.
A Pandession is a new word because it is a new thing. Language is vitally important when confronted with something novel. If you don’t have the language, you can’t visualise, conceive of or think your way out of it.
How long can we go on like this and when will the money run out? This is the question I am being asked all the time. Whether I am out for a walk, in the supermarket (at a safe distance) or on the phone, it’s the same question over and over. How long can we survive?
Some people are concerned about the massive increase in Government spending via the wage subsidy. When will that money run out? Small business owners want to know how long this can go on before they default on loans.
Whether or not we can avoid an economic depression will be determined by what we do now. Amid the pessimism it is crucial to appreciate that it is possible to avoid this outcome if we deploy all the right levers of economic policy. The European Central Bank (ECB) has underwritten the economy at borrowing rates below zero. As a result there should be no hesitation in borrowing more to tide us over.
We can also reprice existing debt to dramatically reduce the cost of outstanding debt, and we can boost demand to cushion the slump by putting money directly into people’s and businesses’ accounts.
Economics is not a cult. It is not a set of definitive, unchanging rules. It is not a religion. There is no creed. There are no believers and there is no dogma. While there are clubs or factions, membership of those is optional. At its core, economics is the art of the possible. It is the study of a complex system that is never at rest, a dynamic and adaptive system of enormous energy and potential. It evolves rather than grows or contracts.
The economy is like an immune system, dealing with new dangers, learning on the job and constantly acclimatising. Despite what most economists say, there is no such thing as equilibrium. A moment’s thought would tell you that an economy in equilibrium is a ludicrous notion.
The colours of the traditional barber’s sign, a pole with red and white diagonal stripes, signify blood and the barber’s apron because the barber use to double-up as the local leacher. He was the man who bled the sick. For hundreds of years, since the Greeks, rudimentary medics believed that sickness was carried in the blood and the solution for this was to drain the patient of blood in order to expel the bad blood. The theory was that the less blood, the less the disease had to work with. Sometimes they used leeches to do this but oftentimes, they simply cut a vein – or perhaps an artery. The barber had blades, knives and scissors, sure what more did you need?
How we behave in this crisis will determine how we come out of it. In the 1960s Martin Luther King spoke of the “fierce urgency of now”; what is critical in a crisis is today – tomorrow can look after itself. We can view our traumatised economy in a similar way.
From the point of view of commerce, the most critical point is to keep small businesses afloat and prevent mass bankruptcies, which would prompt defaults and prevent business people from getting back on their feet.
When events change, we change our minds. Old rules go out the window and new ideas are embraced. What was once radical becomes mainstream and what was once mainstream becomes redundant. In a crisis, you run out of time. You can’t wait; you must act.
This week, the Department of Finance acted with remarkable speed, implementing what might be called the “Danish model”, soldering the link between employers and employees by subsidising people’s wages to the tune of 70 per cent. The civil servants are to be commended in how quickly they turned this around. It should help enormously. Hopefully, we will see results in a stabilising of the rise in unemployment.
What can we do now to prevent this crisis getting worse? What can Irish policy-makers do to prevent company closures, militating against more mass redundancies? How can we buy time? Buying time is a critical way of looking at the crisis because in a crisis you run out of time, not money. It’s essential that actions we take today are designed to ensure that a temporary crisis doesn’t become permanent chaos.
The good news is that this will pass; the better news is we can do something to cushion the blow; the even better news is that it demands only courageous thinking and action. The bad news is that, up to now, there is little evidence of courageous thinking, and that includes the European Central Bank’s €750 billion mega-intervention.
We are in a crisis. The health panic will be followed by an economic panic. People will stop going out, stop shopping and dramatically reduce spending. This will have an immediate impact on cashflow. Without cash, businesses will go bust. Without cash, suppliers don’t get paid and they in turn can’t pay their creditors. The knock-on effect will be swift. Tax revenue will seize up. In addition, businesses without cash can’t pay their employees who will have to be laid off. This will exacerbate the slump.
Unfortunately, as cashflow dries up, those with cash will hoard it. Hoarding is the natural reaction to a panic – witness what is happening right now in supermarkets. The same will happen with cash. As more and more cash disappears from balance sheets, more and more cash will be hoarded. In fact, as always happens in a panic, more cash will be hoarded than is actually needed for the rainy day. That’s human nature; we overreact when panic sets in. There will be a run on cash as businesses try to stay open.
The loud woman at the bar of the French Roast on New York’s Upper West side is agitatedly telling her brunch partner, and (given her operatic volume), everyone else in the joint, how her business in China has stopped working.
“It’s gonna happen here too,” she admonishes. “We’re gonna have to shut the place down.”
The excoriation of Sinn Féin in recent days seems to be directed from the top, with the intention of softening the ground for a Fianna Fáil-Fine Gael coalition. ABS (“Anyone But Shinners”) certainly gives cover to both leaders, allowing them to ask their followers to hold their noses and do the deed with each other, based on having no alternative.
A battle is raging right now for the soul of both Fianna Fáil and Fine Gael. Political parties are a bit like golf clubs: rules and sacraments that matter enormously to members seem silly from the outside. Members of Fianna Fáil and Fine Gael are agonising about purity rather than policy.
The Metzer Eck in central Berlin is one of those traditional German bars – lots of beer, sausages and bread designed to fill you up. Nothing fancy, nothing elaborate, everything simple and, like almost everywhere in Germany, affordable. It’s a wonderful place to be the night Leipzig give Spurs a lesson in attacking football.
I’ve been coming to this spot for four decades. In the 1980s it was firmly behind the wall, and still has a bang of the DDR off it. The locals are in great form, discussing football and rent control, and later, after more pints, politics.
In keeping with the times, let’s quote Vladimir Lenin. The Communist leader, looking back on the October Revolution and seeing it in the context of what had gone before in Russia – from late 19th-century Tsarist reforms to the 1917 Bolshevik takeover – quipped “there are decades when nothing happens and then there are weeks when decades happen”.
Believers in the Leninist world view of big epochal moments might be tempted to conclude that Irish politics has just witnessed one. By this analysis, the previous status quo has been shattered, and a new paradigm is taking shape, whereby old people vote Fine Gael or Fianna Fáil, and young people vote Sinn Féin.
While we are engulfed with the election and wondering who might form the next government here, spare a thought for the world economy. Given that we are among the most globalised countries in the world, it might be prudent to look up from our own political navel and take stock of the past week in global affairs.
After 10 years of a global economic expansion, against a backdrop of historically low interest rates, debt levels are higher than ever and the global economy is more integrated than ever, not just financially but also from a supply chain perspective.
a situation which creates a sudden increase in wealth, good fortune, or profits.
The bonanzavirus has struck. It is a dangerous, fiscal virus spread by politicians, and is particularly virulent in the excessive heat of an election campaign. The increasing political temperature, cramped living conditions and survival instinct change the economic molecules in politicians’ heads, coaxing them to abandon all budgetary decency.
Housing should be the defining issue of the upcoming election, but for Fine Gael the most recent developments on housing policy might be too little, too late.
Latest figures show we are building more houses than at any time in the past 10 years. A favourite indicator of mine to assess house building is the ESB grid connections, which show new homes signing on to the electricity grid.
Election season can be an opportunity to signal a change in behaviour. Arguably the politics of behaviour is one of the key crucibles of any modern election. People change their habits and do so regularly.
For example, in the 1970s, people lit up almost anywhere, smoking away in other people’s houses, in pubs and on buses. Today, smokers congregate outside. In the 1980s, drink driving was common. It was regarded as a bit iffy but we did it.
The imminent general election is likely to boil down to a showdown between the party of bricklayers and the party of bookkeepers.
In a country where we need to build housing yet keep within a budget, the bookkeepers will try to convince us that they can build, and the bricklayers will assert that they can balance the books. Which one of these voters believe will likely be the party that wins.
It’s pretty clear that we will have an election in the next six months. Although most of the debate will focus on domestic issues, particularly what can be termed supply issues, such as housing and transport, it is a good exercise, at the start of the year, to stand back and take stock of what is likely to be happening outside this jurisdiction.
Here are eight economic and political issues affecting Ireland.
When examining what is going on in any economy it is essential to have a framework to understand how the economy works and where it sits in the global scheme.
One of the reasons I was so agitated by the credit/housing boom of the 2000-2008 period is that in any framework the economy was bound for meltdown. You could go so far as to say that that economy was set up to fail. Yet all the official economic forecasting institutes missed it, preaching the soft landing mantra.
Today, those same institutes have been underestimating the strength of the economy year in year out since 2015. Indeed, official economic organisations have been at one in warning that there would be a Brexit-inspired slump by now, arguing that uncertainty would ebb away at confidence, leading to a slowdown. But the opposite has happened.
It’s easy to be a little perplexed by attitudes towards multinationals, given their transformative impact on our economy, their complete upgrading of our industrial base and the enormous capital and technological transfer their presence in Ireland has facilitated.
Economically, without multinational investment, Ireland would be Albania with brutal weather. Politically, without multinational commitment to Ireland, Ireland would likely have succumbed to the populist, nationalist, protectionist disease that is afflicting most western politics.
Ireland’s economic performance can be divided into two time zones; premultinationals and postmultinationals. In the premultinational period, from 1921 to 1991, when multinational investment was modest here, the Irish economy was the worst performer, in terms of income per head, in western Europe. Not the fifth-worst, not the third-worst; the worst. Since the multinationals began to select Ireland as a bridgehead into the EU, from the early 1990s onwards, Ireland has been the best performer economically in western Europe. Not the fifth best; the best.
Today is Dean Jonathan Swift’s birthday. He was born on November 30th, 1667, in the parish of St Werburgh’s in Dublin. Last weekend, I was asked to speak at his cathedral, St Patrick’s, as part of the Swift Festival.
It’s not every day you share an altar with the Archbishop of Canterbury, Justin Welby (or indeed, with a former president of this country, Mary McAleese). The subject was identity and, specifically, Irish and British identity after Brexit.
Given the enormous constitutional upheavals that could be triggered by Brexit, not just in Britain between England and Scotland but obviously on our island too, “conflicted identity” may become a political buzzword of the third decade of the 21st century.
The word impeachment comes from the Latin “impedicare” meaning to catch with the foot or trip up. The American process of impeachment was inherited from the English. In pre-independence colonial America, the British instituted a process of impeachment to make sure that the king of England’s officials in the colonies, who had enormous powers, remained straight.
Originally, impeachment was a process whereby a grand jury was instructed to find sufficient evidence to commit to trial a high-ranking official – or indeed colonial governor – who might be taking bribes, using his position to advance his personal cause or consorting treasonously with a foreign power. Back then the foreign power would have been France, as imperial France was constantly at war with imperial Britain in north America and the Caribbean.
After the War of Independence, the USA did not start as a republic with a constitution but as a loose confederation of equal sovereign states. This messy arrangement proved far too disparate; and the revolutionaries decided to create a strong centralised executive with a president.
Looking out at the Atlantic from Lahinch in Co Clare, it’s hard to believe that one in 10 people was evicted in Ireland during the Famine. Two million Irish people emigrated in the 15 years from 1840 to 1855. Out here you can still sense this emptiness. Most Irish emigrants left from the west coast, heading across the ocean. Imagine what this part of the country would look like had they stayed.
The Famine, the result of immediate crop failure, was also the direct consequence of the conflict between a land-owning class and a landless class, leading to the Land League, which, most Irish historians agree, was the catalyst for the independence movement that led to the creation of the State.
Seen against this background, it can be hard to understand why the interests of the land and its income – rent – are still regarded as sacrosanct in Ireland.
Thirty years ago today the Berlin Wall fell. At the time it was widely thought that the main economic beneficiaries of the collapse of communism would be the former Soviet satellite states of eastern Europe, suddenly liberated from the stultifying grip of Marxism-Leninism.
This was particularly the case for countries such as Czechoslovakia and Hungary, which had impressive manufacturing bases before the second World War. The theory at the time was that educated and technically able communist workforces would embrace capitalism, attracting western investment due to relatively low wages, thus propelling those countries upwards.
However, the country that benefited most from the end of the cold war was one that had been neutral, poor and peripheral to the major conflict of the 20th century. That country was Ireland.
Are we witnessing the beginning of the end of meat? Will future generations regard our habit of using an animal’s digestive system to turn vegetable protein from grass into living body parts, and ultimately slaughtering that animal in order to ingest what was the original vegetable protein, as not only barbaric but idiotic?
I say idiotic because, already, science can replicate meat using plant-based proteins.
Burger King this week announced it will be selling two plant-based burgers at its burger joints all over Europe. The Rebel Whopper and the Rebel Chicken King are already available in Sweden and are soon to be “rolled out” across Europe. When Burger King – hardly a cutting-edge player in changing dietary tastes – embraces synthetic meat, you know something significant is afoot.
This week an American survey ranked Ireland as the eighth most entrepreneurial society in the world. This is an essential characteristic if we are to maintain our relatively high standards of living.
In economics, not enough attention is paid to this cussed, sometimes unreasonable creature, the entrepreneur. Without the relentless pursuit of new business, an economy will stagnate, and without economic growth, tax revenue dries up, resulting in less money to fix social problems. A healthy economy is a risk-taking economy.
Over 70 per cent of Irish people are employed in small domestic companies. This is higher than the EU average. More than half of all Irish people are employed in small or micro companies that employ under 49 people.
What if everything you know is wrong? Imagine what it would be like, had you devoted your professional life to a discipline governed by reasonably predictable rules, only to find out, 25 years later that the rules no longer applied?
Spare a thought for the traditional macroeconomist, who has seen this happen. But the changing economic rules also affect your pay packet, and not in a good way.
For most of the past century, the world’s policymakers have been on the alert for inflation. The 19th century was an era of practically zero inflation, whereas the 20th century, in economic terms, was a period characterised by inflation. This was most notable during the 1920s in Germany and Austria, the 1970s in the United Kingdom, and the late-1960s to early-1980s in the United States.
If you happen to be a Jackeen relation of a large Cork family, we might get together and form a self-help group. Given the amount of inter-cousin abuse I’ve had to endure over the years, it’s tempting.
Being a semi-detached, arms-length Corkonian comes with its burdens but they are but nothing compared with those carried by the Leesiders themselves, who combine fragile victimhood with muscular self-regard. But putting the inter-city rivalry aside, one thing is clear to me: if Cork doesn’t succeed economically in the years ahead, Ireland will also go backwards.
Cork is the litmus test when it comes to Ireland’s ambition to lift the burden of development from Dublin’s shoulders. If Cork can’t do it, nowhere can. The development of Cork won’t come at the expense of other cities such as Limerick or Galway, but will be complementary, and is vital for spatially balanced growth in the country.
Have you ever wondered why the windows of the Bank of Ireland on College Green in Dublin are bricked up? It is because of the imposition of a wealth tax, called the “window tax”.
Ireland, the UK, Holland, parts of northern France – unlike the Mediterranean – are starved of natural light at certain times of year. In the pre-electricity era, light was a luxury in these countries.
The urban poor lived in a dark world of gloomy, window-less hovels, while the rich who wanted to live in the brightest rooms possible, built magnificent ceiling to floor windows to let in the light . Georgian sash windows attest to class difference; the poor lived in the shadows and the rich lived luminously.
On Wednesday evening at rush hour, with rain falling steadily and traffic bumper to bumper, I hopped on the Dart from Dún Laoghaire to Dublin city centre. Plugging in my headphones, I thanked my lucky stars that I live in one of the few areas of Ireland that has a reliable train service.
Relaxed ahead of a meeting, safe in the knowledge that the train would be on time, I considered how good public transport infrastructure enhances our lives. It’s not just a means of getting from A to B , it’s a mark of a civilised, democratic country. But why should citizens who live along the Dart line enjoy a luxury that is denied to others?
Providing public infrastructure is a basic function of any state – and we are failing. The track my Dart runs on was laid before the Famine. I’m not joking. Transport infrastructure is an ongoing project, and a country with a growing population and ambitions to compete internationally needs to constantly upgrade.
Dubai is not for everyone. The glittering metropolis, which erupts out of the desert, captures much that is good and bad about humanity in a few square miles.
On the good side, this extraordinary trading hub, reveals what human ambition can achieve. As it waves its two diamond-encrusted, air-conditioned fingers to Mother Nature, a city where none should be, Dubai stands testament to what can be done through sheer force of will and extraordinary urban vision.
On the other hand, Dubai’s legions of mostly Asian labourers, who toil away under the searing heat, remind us again of the world’s unacceptable inequalities and how – irrespective of the huge strides made in recent years – the lottery of location or the accident of birth, dictate our time on this Earth. The city’s success is partly a product of deeply problematic bonded labour.
Two years ago, my son spent half his transition year in the Vedado area of Havana, a few miles west of Havana’s extraordinary old city. Havana is a vibrant city. There might not be a more exciting place to learn Spanish – and the competition is stiff. The Spanish-speaking world hosts some of the most pulsating cities on Earth.
He stayed with a Cuban family, immersed in the fascinating psychodrama that is everyday life on that island.
When I went to visit, I was delighted to encounter himself and his mate haggling with the local cab drivers over fares, gesticulating wildly, half theatre/half commerce, in an accent that the locals told me was pure Havana.
Ireland’s population is surging, the fastest-growing in Europe, on target to hit five million citizens next year. Such burgeoning dynamism implies that our approach to planning and urbanisation needs to be revised.
The new reality promises all sorts of opportunities. For example, a rapidly rising population and, more significantly, large-scale increases in employment signal lower income taxes.
When your population rises, so does your tax base, and therefore income tax levels should fall, if we manage it properly. Conversely, as taxes fall and demand for housing rises, house prices are liable to increase unless we manage the economy better than we do at the moment.
One of the most difficult questions for any parent is: “What should I do in the future?” When your child asks you what is a good job, can we honestly say we have any idea?
Many jobs that pay well now, such as the highly sought-after data analyst, didn’t exist 10 years ago. What hope have we, mere parents, of predicting the future jobs market? Things are changing so quickly, driven by technology. Consequently, even making a stab at what might be vogue in five years is highly speculative.
The best we can do is look at big trends that are emerging all over the world.
There is something deeply elemental about being woken up by streaks of forked lightning illuminating the darkness in electric blue followed almost immediately by booming claps of thunder as a violent Adriatic storm passes just over the roof.
The Romans understood the power of the elements and observed that, in mid-August, the searing heat and soaring temperatures of the previous weeks tended to clash with colder weather coming in from the north or west, leading to dramatic electric storms. They took this to be a sign from the gods that one season was over and another starting.
Emperor Augustus named the 15th of August Feriae Augusti or the festival of Augustus, falling in the middle of the most significant month in the year, which naturally took the Emperor’s name. Today all Italia still closes on August 15th or Ferragosto, the modern Italian version of the Latin name.
This week, the column will focus on global economic policy and why central banks – still the most powerful economic institutions in the world – don’t understand how disruptive technology is changing the way our world works.
What if they are stuck in a late 20th-century mindset not sufficiently clued in to the impact of new technology and therefore, as the world worries about an impending recession, they are like old generals, fighting the last war not the new one?
This week saw a flurry of activity from the world’s central bankers. From the US to New Zealand, Thailand and India, interest rates were slashed to all-time lows. Why the hyperactivity now? What they are up to?
The Brexit saga has become a bizarre hostage situation: Boris Johnson is the kidnapper, the ransom is the backstop and Ireland is the hostage. Johnson is demanding the EU drop the backstop or he will shoot the hostage. We’ve been here before. Traditionally, the mantra has been: “We never negotiate with terrorists.” Let’s see what happens.
We all appreciate the notion that if we reward bad behaviour, a kidnapper will resort to intimidation again. The European Union has a choice to make. Ireland will survive this. It might well be convulsive but the economy is strong enough, just. And then what?
When you think about it, the “no-deal” option is only “no deal for now”. No deal is not a long-term option; ultimately, the United Kingdom will have to do a trade deal with the EU. The facts are pretty straightforward – 47 per cent of all UK exports go to the EU and, in turn, 52 per cent of all UK imports come from the EU. No matter how the hostage drama turns out, no matter what the political and economic fallout, the UK will be back at the table very soon. The more chaos at British ports, the shorter the self-imposed mercantile lockout.
As Ireland is one of the most globalised economies in the world, we should pay more attention to global trends than we pay to local or regional ones. Granted, given what is happening in London, this week has been an epoch-changing one in terms of Anglo-Irish relations. No one can be reassured by the complexion of the UK cabinet and their collective delusion that only Ireland now stands between them and their great neo-Elizabethan swashbuckling Brexit adventure.
But Westminster is not the only story. Because of Ireland’s trade flows with the US and the EU, the outlook for the global economy is as important for us as the political machinations in Whitehall, even though it doesn’t seem so right now. In fact, as a trading nation which exports six times per head more per worker than the UK, Ireland is much more plugged into decisions taken all over the world than those unveiled in London.
Remember the Rumble in the Jungle? The 1974 Muhammad Ali versus George Foreman fight in Zaire was one of the biggest upsets in sporting history. Ali was supposed to be knocked out by the younger, stronger world champion. Few fighters had gone more than four rounds with Foreman.
Ali gambled if he could last more than four maybe the brute force of Foreman would lead Foreman to tire himself out as he rained blows down on his opponent. But how could Ali survive the onslaught?
This is when he devised his now famous “rope-a-dope” strategy. Ali calculated that he might, just might, be able to absorb Foreman’s blows by lying on the ropes, allowing their elasticity to dissipate the enormous power in Foreman’s punches. He also suggested that Foreman wouldn’t be clever enough to realise what was going on until it was too late.
Strange things happen to countries’ establishments after serious crashes. Before the 2008 crash, it was deemed patriotic to talk up the economy and paint Panglossian scenarios about the future.
Back then putting on the “green jersey” meant cheerleading the credit/housing boom and vilifying the doubters. The disposition of the establishment was cavalier; these insiders could see the runway and a “soft landing” was imminent.
Today, chastened by experience, the preferred position of Ireland’s insiders is one of caution, probity and rectitude, at least in the tone of public statements. Putting on the green jersey isn’t half as much craic anymore.
If Boris Johnson is the answer, what the hell is the question? Perplexed? Who isn’t? Not for the first time over the past few months, the revealed nature of England, a country we thought we knew, confounds us.
To understand the dynamics at the top of the British government, and to guess what might be the question to which Johnson is the answer, we have to dig a bit.
It is individuals – rather than institutions – who make the big decisions, and therefore personal testimony and first-hand experience of those individuals can be useful in teasing out that which has rendered logic and analysis redundant.
Great political parties can and do disappear. It is a fact of history. The Irish Home Rule Party disappeared in 1918. Around the same time the Liberal Party, the party of Gladstone, began to atrophy, and was ultimately eclipsed by the Labour Party.
In both cases, great events – the 1916 Rising and the first World War – changed politics forever in their respective countries. In the UK the Liberals were destroyed by the Labour Party, who reframed 20th-century politics as a battle between workers and capitalists.
These big events change the rules, and it looks like Brexit is one such event for the current crop of British parties.
One of the most essential, but least well-understood aspects of macroeconomics is that economics is counterintuitive. This is because macroeconomics, unlike accountancy, is more concerned with the collective than the individual.
The rule of thumb that dominates economics – again, as opposed to accountancy – is that what is good for the individual is not always good for the collective. When things are going really well and demand is very strong, like now, the Government should, counterintuitively, act to dampen it.
When demand is strong and people and companies are spending, the State should save and build up a surplus. Because, as night follows day, there will be a downturn, when people stop spending.
As the China-US trade war sends international stock markets reeling and threatens to escalate, economic history can help us make sense of it.
For example, recently in Russia, during an inevitable conversation about the UK and Brexit, some Russian friends compared the much-loved (in the West), Mikael Gorbachev to Boris Johnson.
To our ears, Gorbachev is the brave hero who brought democracy to the Soviet Union. Comparing the great Russian reformer with the buffoonish Johnson appears unfair and harsh, but many Russians dislike Gorbachev intensely. They accuse him of having – like Boris Johnson – no sense of responsibility.
The Berlin taxi driver was a bit groggy on Tuesday morning. The night before, Union Berlin, the East Berliner football team – used to playing second fiddle to the more celebrated West Berliner Herta Berlin – won promotion to the Bundesliga for the first time in the club’s history. Next year, Union will be lining out against giants such as Bayern Munich, Bayer Leverkusen and Borussia Dortmund. It had been a long night in the city.
After the essential few minutes on football and a quick natter about Berlin in springtime, when this tree-lined city turns green, we switched to politics. He was proud to tell me that Berliners know how many trees are in the city (430,100) but don’t know how many immigrants live in the city.
In one sentence he framed German politics on the day after the European election, when the big story was the surge for the Greens in what was West Germany and the dogged gains for the Alternative fur Deutschland (AfD) in the old East Germany.
When Zeus heard that the boy Apollo, his child with one of his lovers, Leto, had incensed Zeus’s wife, Hera, by killing the python Hera had sent to kill Apollo and his twin sister, Artemis, he banished the twins to Delphi for eight years.
While there, Apollo, a god of many talents and traits, one of which was that he couldn’t lie, established the Delphic Oracle. The mortals could ask the Sybil, the high priestess who looked after the oracle for Apollo, to tell their future.
The Sybil would then interpret the prediction in a ridiculously ambiguous riddle, so as to be never exactly right but never specifically wrong. Such ambiguity allowed the gods to cover their backs and left the mortals scratching their heads.
Last week Uber, the taxi-sharing app, floated on the New York stock exchange. As a result the company is now worth just over $65 billion.
We are entering the 11th year of a bull market, and because success tends to breed a disregard for the possibility of failure, investors expressed “disappointment” at the shares’ performance in the first few days of trading.
Does this tell us where we might be in the global economic and financial cycle? Tech insiders are said to be “disappointed” at this valuation of more than $60 billion for a taxi firm with precious few assets, that has no immediate prospect of making a profit, and burns through $2 billion of shareholders’ money a year.
The Irish State is going to pay the lion’s share of the upfront cost of rolling out broadband around the country and then is going to gift this infrastructure to a private investment company. Take that in.
The private company has the potential to sell off these assets at a profit – even if the State allows itself some clawback of such funds. That is what private companies tend to do.
As a result, over the next 15 years or so the average Irish citizen will end up transferring billions to a small number of people. And we still won’t own the infrastructure.
The corner of Middle Abbey Street and Marlboro Street in the centre of Dublin is a heroin bazaar. Every day about 10am, almost in the shadow of our national theatre, dozens of addicts line up in a reasonably orderly queue and one dealer arrives with a plastic bag of wraps of heroin and a second dealer holds another plastic bag open for the cash.
This goes on in broad daylight. Once the deals are done, the addicts head off, usually up one of the lanes off O’Connell Street or down to the Liffey boardwalk to bang up. The street dealer heads off to get more gear from a bigger dealer higher up the chain.
And the miserable cycle of dealer, addict, money, heroin, crime and destitution, rotates with life-numbing daily regularity.
The 2019 Sign of the Times survey by Behaviour & Attitudes provides a useful snapshot of an economy where the majority of people think things are going well, younger people still feel they will be better off than their parents, but where the housing market and childcare costs divide the generations, leaving younger adults stressed and the older generation much more chilled.
The survey reveals a society where only 14 per cent say they are struggling financially, with 37 per cent saying they are living comfortably.
As this column argued last week, although it is unfashionable to say so, the country is now a reasonably content, reasonably tolerant society, generating lots of jobs and embracing immigrants and diversity like never before.
When it comes to celebrating the Republic – 70 years old this weekend – the most significant socio-economic achievement of the State has been the gradual but relentless expansion of the Irish middle class. It might be deeply unfashionable to champion the growth of the civic bourgeoisie, but the expansion of the middle class is a profoundly positive accolade.
In contrast to many western countries that are seeing their middle classes shrink, the data tell us something we know already when we compare our lives with our parents’ lives and their parents’ lives: Ireland’s bourgeoisie is in rude health.
I am one of those odd creatures who likes to sit on a train in the opposite direction to which the train is travelling, preferring to see the world going by me, as opposed to coming towards me. You get to see more of the panorama of a train journey that way.
This week, as the train pulled out of Connolly for Belfast, I took in the capital’s inner city and the docks from my elevated position above the traffic. Scanning the city, framed by the Dublin mountains on the horizon, you see many cranes on the skyline.
The crane count published last week is reminiscent of 2007. It reveals that there are 117 cranes in the Dublin skyline – a near-record figure.
Britain in 2019 doesn’t feel quite like Yugoslavia did 30 years ago, but then again Yugoslavia didn’t feel like Yugoslavia until it became the former Yugoslavia. Brexit is pointing to the end of the UK.
The surface unity of the May-Corbyn truce is nothing but a marriage of convenience forged in desperate circumstances.
Long-term, we face something bigger than the UK leaving the EU: we face the potential Balkanisation of the United Kingdom.
In his hilarious and award-winning novel Absurdistan, the American writer Gary Shteyngart tells the story of Misha Vainburg, son of the 1,238th richest man in Russia who flees Russia for the imaginary country of Absurdistan.
Absurdistan is a post-socialist, cowboy-capitalist, ethnically divided oil kingdom somewhere on the shores of the Caspian Sea. The capital, Svani City, is an uproarious metropolis, desperately trying to mimic a western urban entrepot.
And what defines western in these people’s eyes? Naturally, a McDonald’s, the twin Hyatt and Radisson hotel offering, a Banana Republic, a Gap and of course, a “Molly Malone’s” Irish pub.
As the train screeches to a halt, the young man, in his slim-fit Tom Ford suit, alights energetically. This is Revolution Square station, deep beneath Moscow’s congested boulevards.
Built in 1938, the station is one of the gems of the Moscow metro system, itself one of the finest pieces of public transport infrastructure in the world. Stalin understood symbols. The metro system served as a reminder of the splendour of the Soviet Union. In the war, these places were air-raid shelters. In 1941 and 1942, a hundred war babies a month were being delivered down here as war raged overhead. What else are you going to do?
Today, the metro carries seven million passengers a day, close to half the population of this enormous city of 15 million citizens. Trains arrive off-peak every two minutes and at rush hour every 30 seconds.
I’ve hit Peak Brexit. I can’t stomach watching the nightly political blood-sport that is BBC’s Newsnight anymore.
I can’t listen to self-important Tory politicians, who have somehow risen above their natural station in the Territorial Army Cadets, droning on about being trapped; or Labour politicians for that matter, spouting equally infantile, neo-Marxist drivel.
That’s it. I’m done.
There’s something exciting and substantial about Berlin. The city exudes history. Bismarck and Hitler are here, but also Karl Marx, Rosa Luxemburg and Angela Merkel. Political decisions taken here often have a far-reaching impact.
In terms of ramifications, who would’ve thought that one of the standout beneficiaries of the fall of the Berlin Wall would be Ireland?
This year marks the 30th anniversary of the fall of the Berlin Wall, the seminal geo-political event of my generation. No one, least of all the CIA, expected it.
Is Ben Bernanke the father of Alexandria Ocasio-Cortez? Not in the literal sense, obviously, but in the philosophical and political sense.
As we mark the 10th anniversary of the bull market, it is worth considering whether the efforts of the US Federal Reserve, under Mr Bernanke’s leadership, to avoid 1930s-style debt deflation ended up spawning a new generation of socialists, such as the freshman Congresswoman Ms Ocasio-Cortez, in the home of global capitalism.
Mr Bernanke’s unorthodox “cash for trash” scheme, otherwise known as quantitative easing, drove up asset prices and bailed out baby boomers at the profound political cost of pricing out millennials from that most divisive of asset markets, property. This has left the former comfortable, but the latter with a fragile stake in the society they are supposed to build.
If asked to list the significant threats to the Irish economy, you might be inclined to identify Brexit, artificial intelligence or the EU approach to our tax system. Or you might think about the shortcomings of our education system, the lack of proper housing or the general cost of living.
Typically, we perceive threats to be part of “the system”, the political class, the banks or some events far away over which we have little control, such as Donald Trump or contagion in global financial markets. And then there are threats to the system coming from radicals who want to force change and lurch to some extreme or other.
What if the most significant threat to Irish prosperity is much closer to home, hidden in plain sight? Could the real menace to Ireland come from what could be called the “contented class”, not from those who want to shake things up?
Watching Sanders this morning, cajoling his troops, emoting his followers and leading them again, it is clear that what underlies his movement and gives him energy is the cause. The objective is to give more and more people access to some of the enormous wealth of this extraordinary country.
“The way he was talking, you’d be mad to rule out another presidential bid in 2020.”
This was my conclusion to an article published following a weekend at the Sanders Institute in Vermont last November. It ran counter to the prevailing wisdom that Bernie Sanders shouldn’t/couldn’t/wouldn’t run for the US presidency again on the grounds that he was too old. If elected in 2020 he will be 79 years old, which would make him the oldest Democratic president ever.
Being best man is always a tricky business; being best man at a North-South Co Down marriage in July 1994, came with a whole new set of challenges.
The speech was a minefield. When you are involved in a ceremony officiated by the moderator of the Presbyterian Church in Ireland, you are alert to the cultural fault lines between the North and the South, not so much the well-signposted differences, as the disguised incendiary devices primed to go off even when you think you are on safe ground.
Ten years ago, faced with mass bankruptcies and the very real prospect of a rerun of the Great Depression, the US Federal Reserve took the fateful decision to unveil a new policy called “quantitative easing” or QE.
This anniversary may seem unimportant but it should be commemorated because the policy of QE changed politics more profoundly than almost any other event or policy initiative in the past decade. Ironically, a policy that was supposed to protect the balance sheets of the wealthy has unleashed forces that may lead to the appropriation of those assets in the coming years.
Few societies in the world have been so positively transformed by the economic opportunities arising from globalisation as Ireland. Countries get rich from trading, and small countries get rich quicker when they can escape the limitations of their own small domestic market by trading with the rest of the world and getting their message heard beyond their borders.
The heyday of globalisation has been from 1990 to now, although things are changing with trade wars, nativism and protectionism. Countries like Ireland have a lot to lose if the world gets smaller.
In the upmarket Johannesburg suburb of Rosebank, I sip a beer. This is an affluent place full of beautifully designed – but heavily-guarded – homes. “Bunkering” is what white South Africans call it.
When you are afraid of going out, you invest in your fortified “bunker”.
This is where you entertain friends, where your kids feel safe and where you can block out some of the more threatening realities of daily life in this teeming metropolis.
Seamus Mallon described the Belfast Agreement as “Sunningdale for slow learners”. In the end, Brexit is likely to be “Norway for slow learners”.
Events this week mean it’s now probable that the UK will limp out of the EU in two months with a cobbled-together, Norwegian-style deal. On the face of it, little will change materially until the final trade deal is hammered out.
Except everything has changed.
Few songs capture the power of branding, commercial manipulation and consumer yearning like Janis Joplin’s Mercedes Benz.
With her opening lines “Oh Lord won’t you buy me a Mercedes Benz”, Joplin sums up the “arms race” nature of modern consumerism whereby one purchase, in this case her friends buying Porsches, has to be cancelled out by her getting a Mercedes-Benz.
At this time of the year, newspapers are packed with predictions about what is likely to happen to the economy in the next 12 months. Underpinning all these views, whether negative or positive, is the pretence that the economic cycle in some way neatly follows the Roman calendar, as if the economic cycle begins on January 1st and ends at the stroke of midnight on December 31st.
Of course this is not how the economic world works. The economic cycle is impervious to our calendar cycle. Possibly because our human need for order, control and rhythm is so great, we feel compelled to align the economic cycle with the 12-month calendar cycle. In reality, the economy is a much more unregimented creature. The peak to trough of the economic cycle can last years. For example, the US is now in its 10th year of an economic upswing. Similarly, the Irish crash didn’t start on January 1st of any year, and end the following December. It kicked off abruptly and the subsequent recovery occurred slowly, bit by bit, over a number of calendar years.
This year was an exceptionally strong one for the Irish economy. In fact, 10 years after a monumental crash which destroyed the balance sheet of many hundreds of thousands of Irish people, the position a decade later is quite remarkable.
At the depth of the crisis, most of us wouldn’t have predicted that incomes would be back above their 2008 peak by 2018.
Despite obvious problems in the housing market, overall performance has been pretty good and pretty good is well, pretty good.
We humans have a tendency to undervalue the significance of pretty good. It is always easier to point out what is wrong, rather than appreciating what is right. We tend to allow some notion of “the perfect” to bully “the good”, as if good is the enemy of perfect; it is not.
Two huge rivers, the Rhone and the Soane which converge in Lyon, have been ferrying goods, people and ideas into this majestic city for centuries. The Greeks were here, so too were the Romans. The Romans made this place the capital of Gaul.
When Julius Caesar was assassinated, the recently subjugated Gauls revolted, prompting the Romans to move their city to the high ground over the rivers. From here the city flourished, close to Italy, Switzerland and Germany, absorbing ideas and people from each region.
Examples of these foreign incursions abound. The Gothic cathedral, a symbol of the power of the Catholic church, was extensively defaced by Calvinists from Geneva who took over the city briefly. The silk industry, created by Italian merchants, drove the bourgeois prosperity of the city for centuries.
The arrest of Meng Wanzhou, the chief finance officer and the daughter of the founder of Huawei, one of China’s richest men, by Canadian authorities on spying charges could be a game-changer for the global multilateral trading system. The Canadians are acting on behalf of the Americans here. Washington is pulling the strings.
Huawei is the world’s largest telecom manufacturer, and the second largest smartphone maker after Apple. America accuses it of stealing American technology; most likely Apple’s technology.
Burlington Vermont is cold in late November. Huge mounds of recently cleared snow attest to the coming of winter, which in this part of the world, just below the Canadian border and far from the warming influence of the oceans, is long, dark and absolutely freezing.
The shops of Church Street are doing a brisk business in quilted jackets, boots and woolly hats. With its open log fires, law-abiding citizens and reusable coffee mugs, there’s a touch of a little Denmark in North America about this place. That is until you see the row upon row of F-16 fighter jets in the airport terminal.
This is definitely America; but it’s not the America we have come to expect in the era of Trump. Vermont is a tolerant, wealthy, almost Trudeauesque corner of the US. It was the first state to abolish slavery, is home to the hippy ice cream moguls Ben and Jerry, and has returned Bernie Sanders to the Senate for the past two decades.
The share prices of Facebook, Apple and Google have slumped. Apple’s is down almost 20 per cent in a few weeks, and the story for the other two isn’t much better.
Over the past few weeks, the so-called Faangs – Facebook, Amazon, Apple, Netflix and Google – have lost $1 trillion in value.
Before examining the situation on Wall Street, let’s step back and examine the process whereby world-beating companies go from rude health to fragility in short order; the process is so much more interesting than the event.
Rosenthaler Platz in Berlin is a busy hub to the northeast of the city centre. The last time I sat on the U-Bahn here, the train slowed down and then passed through a creepy, dimly-lit and empty station with only East German border guards on the platform. It was the summer of 1989, just three months before the wall came down. Rosenthaler Platz was what was called a “ghost station”. The underground was constructed before the wall went up in 1962 and this was one of the stations which was boarded up when the city was divided. The trains from West Berlin passed through East Berlin, weaving right through the middle of the city, only to re-emerge back into the West and literally into the light.
Today it is buzzing with foreign students, start-ups and cafes that have turned themselves into communal workspaces. In fact, the one I am in, Oberholz provides a vision of what much of work life in the future may be like: semi-autonomous, creative teams working together on a project by project basis, hiring space in a cafe for a limited time rather than being full-time employees with full-time tenancy in a fixed office. Right now this is still only a small minority of workers but it could become the norm.
Let’s look at the housing shortage through the lens of planning permission objections. We rarely think about the impact on house prices of individuals or groups of individuals opposing planning permission.
Each objection may be legitimate but, in the aggregate, planning objections have a knock-on effect on the availability and cost of housing. Indeed, the trade-off between individual rights and the collective good, so evident when planning restrictions are sought via objections, goes to the very heart of macroeconomics.
Mayer Amschel Rothschild, founder of the Rothschild banking dynasty, is said to have declared: “Permit me to issue and control the money of a nation, and I care not who makes the laws”. The implication is that parliaments can talk about laws or indeed change them, but the real power in a country or a city lies with whoever controls the money. Everything flows from this.
The story of Rothschild’s ascent from the closed, embattled, ghetto – the Judengasse of Frankfurt – to the seats of power in London, Paris and Madrid is one of the most fantastic entrepreneurial odysseys imaginable. His ability, courage and daring were extraordinary and he took advantage of exceptional circumstances and world-shattering events.
It’s 9am in the Dominican Convent in Dún Laoghaire, Co Dublin. A patient column of people runs all the way down the street as far as the Chinese-run New Paddy phone repair shop. The only other shop doing business so early on a Friday morning is May’s Occasions, which is busy selling communion dresses, tiaras and parasols to cater for the last-minute panic ahead of the big celebratory weekend.
Irish citizens might be about to repeal the constitutional amendment on abortion, but no one would lay a finger on our divine right to host a full-on, over-the-top communion, replete with bouncy castles, gazebos and Instagram poses.
Mystic, Connecticut is one of those beautiful New England fishing villages, all wooden clapboards and two-storey homes. US flags fly from at least half of them. Cars slow down 10 yards from zebra crossings, as young mothers push outsized strollers to organised playdates.
The Mystic river flows into the Atlantic here, and most riverside homes have their own boats, tied up to family piers. People here are ridiculously helpful. Mystic doesn’t do surly. Pumpkins are everywhere, and the colours are gorgeous, but it’s getting cold.
Over the past few days, I’ve been haunted by Conor McGregor’s face. He is sitting on the mat after his defeat in Las Vegas, dazed. He is looking into the distance, apparently trying to take it all in. Obviously he is exhausted, having been almost strangled a few seconds earlier. The bravado is gone. He is humbled.
But for me there is something else in his eyes: the realisation that everything has changed. Conor is a clever man and he understands the enormity of the defeat. It is not just a sporting defeat, it is much greater.
At this time of year my inbox fills up with emails urging me to attend something called a “budget breakfast” on the morning after the budget. Such events are normally held in the plush offices of well-respected accountancy firms. These chrome and glass financial citadels on the river are testimony to the enormous fees paid by the wealthy to advisers in order to avoid tax.
The tax avoidance industry is one of the staples of the professional classes. And the annual nature of the budget ensures that these fees are fool-proof recurring annuities.
Is Brexit the new normal? By this I don’t mean simply the act of leaving the EU, but more the quixotic political cocktail of nostalgia, anti-immigration and the impulse to seal off borders from cosmopolitan influences in favour of nativist urges?
All over Europe, from the Swedish Democrats and True Finns in the north to the Northern League in Italy in the south, from the Brexiteers in the west to Orban’s Hungary in the east, the forces of populism are evident and they are not going away.
It’s time to talk about England and consider what has happened to the English political centre. The political creature that Leo Varadkar is negotiating with this weekend is completely different from anything in living memory.
We are dealing with an extremely unstable political entity, where the centre has been abandoned to the radicals on either side.
Not too long ago, Tony Blair won three straight elections from the deep centre. Given the fact that the DUP now holds the balance of power, it is important to remember that Blair won his elections with huge 120-plus seat majorities. Blair represented a broad wing of the Labour Party that could be described as its social democratic centre.
Let’s talk about urban dereliction. Walk around Dublin, Cork or Limerick and dereliction is everywhere. Close to The Irish Times offices large swathes of Dublin’s south inner city are run down, in need of repair, unoccupied and derelict. And while many buildings may look occupied on the ground floor, once you lift your gaze more often than not the third and fourth floors are falling down.
The same is the case for Cork from where I’m writing today. Walking the length of this lovely city west to east you see something similar all the way from the Mardyke to Custom House Quay, upper floors appear grossly under-utilised and, in the main, vacant. They are certainly not homes or apartments.
This week the influential magazine the Economist suggested that Dublin’s house prices are 25 per cent overvalued relative to long-term income. The Economist was one of the early sirens last time out, warning loudly about the Irish property market in 2003, so it has good form.
More worryingly, in the list of 22 cities, although Dublin was not the most overvalued capital city, it is the one that has experienced most rapid house price growth since 2012.
In the past seven years Dublin prices have increased 72.9 per cent, compared with 63 per cent for Berlin, 54 per cent for Sydney, 56 per cent for Auckland and 60 per cent for Vancouver. Although cities such as London and Paris are significantly overvalued, the British capital has seen falls in the past year, while Paris has always been expensive and has seen prices rise only 6 per cent in the whole of the past seven years.
When thinking about the past there is a tendency to remember the big events, the political crises, the economic moments and the newsworthy stories. This approach only tells us so much about the country and tends to offer blurry snapshots of the big-shots. What about the ordinary citizen? This is where survey data is so revealing. The attitudes garnered in survey data are the creed of the country and this value system represents the suite of beliefs that we professed openly.
In 1981, just after the papal visit and just ahead of the 1983 abortion referendum, the European Values Study conducted a wide-ranging survey of Ireland, interviewing thousands of people. The results expose an extraordinarily conservative country, with deep-rooted animosity to people outside the mainstream, a level of moral and sexual conformity that is quite startling, but also a country whose political stability was not taken for granted.
Over the past few years, I have had countless conversations with old friends, who ask, only half in jest, “Do you know any decent men for [such and such a woman]?”
On reflection, when I go through my net of available single straight friends – and exclude the drunks, the gamblers, the eejits, the bankrupts, the libertines or the plain odd – there are very few “decent” men available.
Yet in contrast, there appear to be an extraordinary number of single women out there. This is not just a hunch: it is fact. Nor is this “Mr Smug Married” moralising about people’s lifestyles and who they live or don’t live with. This is about exploring demographic trends that should be taken into account to properly plan our society.
A city of contrasts and deep divisions, Johannesburg is vibrant, beating with the tell-tale dynamism of a massive conglomeration going places. There is a sense of urgency, relentlessness and possibility. It is sprawling, dangerous and chaotic, yet bursting at the seams with optimism.
The story of cities is the wonderful human tale of individual self-transformation. Cities are places you move to in order to change yourself. Jo’burg teems with millions of newcomers seeking a better life, trying to get away from somewhere and propel themselves somewhere else. Such is the narrative of all great urban centres throughout history. It is the story of the established classes moving out, replaced by newcomers hoping to move up.
On this day 10 years ago, Katy Perry’s I Kissed a Girl was hurtling up the charts almost as quickly as deposits were hurtling out of the Irish banks. Within a few weeks, Ms Perry would go on to sell millions, and the Irish banks go on to lose billions. Yet, even in late July, when they could see what was happening, those in the regulator’s office were still bleating that the fundamentals were sound and the banks were well-financed. That they believed it is one of the most difficult aspects of the sorry saga to digest.
But they weren’t alone. From New York to Frankfurt, from Dublin to Dubai, banks went to the wall in the biggest boom/bust credit cycle the world has yet experienced. It was on the same scale as the 1929 crash, with the added complication of enormous inter-country leverage, implying that the crash was viciously contagious, jumping not just from bank to bank but from country to country.
On September 20th, 1988, nine Irish students at the College of Europe took their places in Bruges town hall. We were waiting for Margaret Thatcher to give the opening address for our coming academic year.
What West Point is to the US military, the College of Europe is to the EU institutions. It is the academic entry point for the European Commission, European Court of Justice, European Central Bank and the various other orbital institutions that make up the European project. Security was tight. The IRA were active on the continent. In August, the IRA had killed three British soldiers in the Netherlands. A few months previously we had the Gibraltar killings. Tensions were high. As was normal at the time, the Irish students, all of us only 21, were singled out for special but not particularly invasive checks.
Let’s just say it was a long night. All around this village, on an Adriatic island where cars were banned many years ago and the locals amble around at a pace that would make Andalusians look like sprinters, flares ignited, strangers hugged wildly and you could hear an entire country roar.
They say voices carry on the sea. Believe me they do. I am in deepest Dalmatia, Croatia’s rugged and beautiful coast. To see our neighbours’ hearts burst open with pride is truly a beautiful thing because Croatia has been through the mill in recent years.
This week’s publication of bumper corporation-tax receipts reflects largely increased income from multinational companies. It comes hot on the heels of a regular financial-health warning that, were it not for the multinational sector, this tax wouldn’t be generated.
In June, a report from the Public Accounts Committee recommended the Department of Finance should identity ways to reduce our “over-reliance” on corporation tax. The Irish Fiscal Advisory Council issued a similar dire warning last month.
Yesterday, the innovative US urban economist Richard Florida gave a talk in Cork about the future of cities.
Florida has been at the vanguard of new thinking about how cities, rather than countries, create economic dynamism. The nub of his argument, building on the work of the great urbanist Jane Jacobs, is that cities – where people are constantly chatting, talking, trading with each other – are the bedrocks of innovation.
There are few better ways to see what the country is going to look like in a generation than from the sideline of an underage football, GAA or rugby match. Children’s sports, alive and well across all codes in this country, give a wonderful snapshot of the different ethnicities living in this large suburban nation.
My son’s football team, on its various travels, has come across outfits made up of well-drilled Lithuanians. They have played against a squad of all-African boys, save for the solitary white goalie – a boy from a Serbian family. And they have togged out against a predominantly Arab club where the back four were all called Mohammed.
In the summer of 1787, determined to show foreign ambassadors the might of Russian power in the newly-subjugated Ukraine, Catherine the Great organised a boat trip down the Dneiper past modern-day Kiev.
Her trusted field marshal, and her lover at the time, Prince Gregory Potemkin, organised a series of mobile villages to appear as soon as the imperial barge, stuffed with foreign dignitaries, came into view.
The Irish economy is not overheating, because the Irish economy isn’t really a distinct economy in its own right. It is a number of smaller economies, some of which compete in the global trading system and some of which are protected and compete within the local or national system. Bits can overheat at different times.
The last time I was in Rome I hired a Vespa. What a way to see the city. Zooming around magisterial, imperial Rome gives you a false impression of the stalled Italian economy. The view from the Tiber is one of a booming, bustling, important capital of a large, dynamic country. The reality is very different, and this came home to me on a recent off-season trip from Rimini to Rome. Italy is in big trouble.
In his wonderful 1979 book The Old Patagonian Express – by Train Through the Americas, Paul Theroux notes that you can tell a lot about the state of a country from the condition of its railway stations.
The 21st century version of railway stations are airports. Airports capture the essence of a city or country. Traffic at Dublin Airport has surged from 18 million passengers in 2010 to 30 million in 2017. It’s still one of the best leading indicators of an economy’s vibrancy. If you want to see the human face of the hectic pace of economic activity, head out to the airport just before 6am any day.
Kingfisher’s Kitchen, just opposite the town clock in Enniskerry, Co Wicklow, on a Sunday morning any time after 8am, is a perfect spot for Mamil (middle aged men in Lycra) watching.
Here he is so self-assured, you don’t even have to sneak up on him. Secure among his own species, the normally socially anxious Mamil congregates with carefree abandon. Today, he luxuriates in the bright sunshine, resplendent in multi-hued plumes of bright pinks, greens and blues.
While property prices in the country in general are still 33 per cent off their boom-time peak, property prices in Sandycove in south Dublin are only 5 per cent off their 2007 peak. They are likely to pass that peak by the end of this year and continue upwards.
The acceleration of Sandycove prices versus the rest of the country is what could be termed the “room with a view” premium. Houses that command a view of the sea or over the city lights have seen their value rocket by more than anywhere else in the past few years.
Lately, have you noticed an upsurge in business cards with people’s academic accomplishments emblazoned on them? It is not uncommon to come away from a conference with business cards exclaiming extraordinary educational achievements, even though these academic exploits have nothing to do with the job the hyper-qualified individual is actually doing.
After a particularly hard night, do you wake up and vow: never again? Guilt, maybe embarrassment, dread and self-loathing kick in. You resolve solemnly that you are not going to make that mistake again.
One of the opportunities Brexit offers this country is that multinational companies, which might have invested in the UK, are now more likely to look at Ireland. If you are the boss of such a company, why would you go to the UK when you worry that your company might not be able to trade freely within the EU – and that the type of EU professionals you hope to employ might not be able to work freely in the UK?
The wannabe Conor McGregor stares out the window from the Luas at the cut-stone walls of Grangegorman. He wears a baby-blue Adidas and Nike combo, Moncler Polo shirt (top button closed), week-old stubble, fresh skin-fade, double-swallow tattoo on the calf, and no socks. Clutching his personally engraved snooker cue, with Biggie blaring out from his chrome Beats, he is a man going places.
The price of third-level education has risen by 131 per cent since 2005, while the price of computer games has fallen by 63 per cent. The cost of clothes has fallen dramatically in the past decade and a half, while the cost of healthcare has risen exorbitantly. The price of furniture is much lower now than it was at the height of the boom, yet the price of childcare has gone up by 34 per cent.
These are the latest trends in prices and costs in Ireland. What is the reason for these huge disparities and what does this mean for the economy, the electorate, and the political cycle?
The schools are closed for the holidays and morning rush hour traffic in the suburbs has dwindled. Traffic reports herald this blessed relief. Driving kids to school, and clogging up roads, is a relatively new thing. Our household is at it too on occasion. Indeed, sometimes it’s the only way of getting them into school at all. However, the school-travel trends are marked. According to the census, in 1981, 21 per cent of primary and 8 per cent of secondary students were driven to school. By 2016, 62 per cent of primary-school kids and 41 per cent of secondary students were driven to school.
Last week, Dublin was ranked the top city in Ireland and the UK to live in, focusing attention on what makes a make a great city. All over the world, cities are driving economic growth. Ireland is no exception. Dublin is more dominant now than ever before.
If house prices are rising by 12 per cent per year yet wages are only rising by about a quarter of that rate, who is winning? Who gains and who loses from this disparity between house prices and wages?
Our family is not good at filling out forms. It’s just not our thing. Life would be easier if we had an enthusiastic stenographer in the tribe – someone who loves a form and a deadline – but such a creature doesn’t exist in our immediate bloodline.
Two weeks ago, this column looked at experiments with babies, revealing just how much humans love to be in control of their lives from a very young age. This observation might help explain, decades later, why some adults vote for the guy who appears to be in control, no matter how flawed his character.
This week, as we are heading towards Easter, formerly the pagan fertility festival represented by little rabbits, let’s stick with the baby theme.
If you have seen the classic 1980s movie Repo Man, or have a passing understanding of the workings of the 1960s pawnbroker, you will know what a vulture fund does.
The vulture is a repo man with more expensive taste in shoes: a pawnbroker in Prada.
One of the most beautiful sounds is the laughter and giggling of babies. There is something, possibly to do with evolution, in their uncontrollable joy that affects us profoundly. Even the hardest curmudgeon tends to be disarmed by a laughing infant.
Fifty years ago an American psychologist named James Watson performed a study on laughing babies.
There is an obvious solution to Dublin’s crippling capacity problem: move our Port and develop one of Dublin’s greatest natural assets into a new, gleaming city. Dublin is one of the last major cities that continues to have a port on its most valuable prime land. Cork is moving its port, and if it’s good enough for Cork, it’s good enough for Dublin.
It’s a month since I binned my incessantly needy smartphone on January 1st, 2018. It is much less difficult than I imagined and the result has been a revelation. Try it and your days will seem longer, books are more appealing, you’ll be far less distracted, more patient and less irritable.