Debt and deficits diverge as financial Brexit looms
As the old saying goes, there is more than one way to kill a cat, and choking it with cream, while apparently kinder, may not be the most effective.
As the old saying goes, there is more than one way to kill a cat, and choking it with cream, while apparently kinder, may not be the most effective.
Statistics are slippery things. Even when they are correct, they can cause trouble, and few are as slippery as those concerning 'precarious' work. Perhaps those Italians campaigning for a change...
Donald Trump goes back farther than I thought. I don't mean the man but the manner - that chilling combination of bombast, bullying and bluster. It was all on view in an interview shown recently...
More bad news. The fertility rate has fallen to 1.9 children per female, which is less than the 2.1 average needed to keep the population stable.
Whatever happened to that four billion euro? This was the amount of money - actually a bit more - which Irish citizens saved in the last three years as interest rates on the national debt and tumbled, compared with what they thought they would pay.
Things are happening that never used to happen before, to misquote John B Keane. In the wake of the Great Recession, some of the laws of economics, as well as of politics, appear to be breaking down.
If only there was a simple formula for predicting market crashes, we'd all get rich. (Well, those who knew it would). But there isn't. Except that, just maybe, there might be when it comes to housing.
The comment of 19th century foreign minister Lord Palmerston, that Britain had no friends, only interests, neatly sums up the nature of international relations; and not just for great imperial powers.
Don't stray from the path; never eat a windfall. Granny's warning in Neil Jordan's movie 'The Company of Wolves' neatly sums up the fiscal advice proffered to government, but as usual the Little Red Riding Hoods of Kildare Street seem in no mood to heed it.
THOSE 2014 commemorations for the centenary of the start of the Great War threw up a surprising analysis. As those around the Kaiser argued for peace or war, there was no clear answer to what Britain would do. The reason? London was preoccupied with Ireland.
DESPITE all the algorithms, alphas, betas and the rest, by which financial markets make their impenetrable way, currency movements remain a mystery.
IT is reported that Sean MacBride, as Foreign Affairs Minister, was reluctant to accept US dollars under the post-war Marshall plan unless the USA made explicit its opposition to the partition of Ireland.
MAYBE they should have rung the church bells. Just about now, the economy will regain the peaks reached in 2007. But then again, maybe they shouldn't.
Poor old John Maynard Keynes. Not only do his successors still argue about what he meant, and whether he was right, the rest of us remember him, if at all, for two things: in the long run we are all dead, and in the 2000s work will have been all but abolished.
COMING up to Budget time, my father, like many publicans, would buy in as much extra stock as the Revenue would allow, in the sure and certain knowledge that the inevitable rise in taxes would allow him a little extra profit.
BREXIT, Trump and now Macron. Throw in Jeremy Corbyn as well, if you like. But of all the popular uprisings, the French one is surely the most astonishing.
FOOL'S gold, they used to call it. Many an old Western ended with the guy in the black hat discovering that the stolen poke contained, not the precious metal but the worthless lookalike (some kind of pyrites I believe).
GOOD luck or good judgment? Or did we get by with a little help from our friends? As the Irish economy continues to amaze, the question of how and why it recovered seems as elusive as ever.
ANY faint hopes that the new Pay Commission might find new ways of setting public sector pay were pretty firmly dashed with its report. To be fair, changing the methodology was not really in its remit, but it does not seem to be in anyone else's either.
A theme in many of the myriad books written about the Great Recession and the political upheavals which have followed, is that there was some kind of fundamental break in the global economy in the 1970s.
EVERYONE else is daydreaming, so why shouldn't I? Just what would the world have to look like for a majority in Northern Ireland to vote to leave the UK and join the Irish Republic and, automatically, the EU?
THE dreary steeples of Fermanagh and Tyrone are casting their shadows over the salons of Brussels, but there is another quarrel whose integrity is almost as long-lasting - that over public sector pay.
THERE can be no doubt that something is going on, as the candidates of the great parties of France are eliminated in the presidential election and enthusiastic young crowds turn out for the extreme left candidate Jean-Luc Mélechon, who misses out in the vote by less than2pc .
No political risk. Back in the days of the two-and-a-half-party system, that was a big selling point for the Treasury Management Agency when flogging government bonds. No matter how our elections went, there was nothing for our creditors to worry about.
THE gist of 'The Undoing Project', the latest book from Michael Lewis ('Liar's Poker', 'The Big Short') is that people don't think the way they think they think.
READING the latest quarterly report from the Economic and Social Research Institute (ESRI), the words of veteran US Congressman Barney Frank came to mind.
THE Irish Question is very difficult, the spoof history of Britain, '1066 And All That', opined. Every time the English find the answer, the Irish change the question.
A glimpse of something which would otherwise be very difficult to capture arrived courtesy of the German business group Ifo. It shows what happens when the retirement age is cut - in this case to 63 years.
WHATEVER happened to the misery index? Once upon a time a combination of inflation, unemployment and growth seemed to provide a reliable indicator of a government's popularity.
Occasionally, when I want to refresh my memory as to how English can be written - and on financial matters too - I dip into Walter Bagehot's 'Lombard Street'.
Ever since we were in the sty together, I have had an interest in that other little Pig, Portugal. Not that Portugal is all that small (10.5 million people) but we shared a common fate.
WE have been warned. At a conference last year, experts from the Economic and Social Research Institute (ESRI) said international health statistics must be interpreted with care. It was dangerous to draw lessons, they said, and worse to devise policies "at a glance".
The Irish economy, like some plodders I'd rather not mention, just wouldn't make it on "Strictly." It always seems to be out of step.
IT is almost 30 years since French company Pernod Ricard bought whiskey-maker Irish Distillers and sales of Jameson are booming. Another overnight success.
AS well as pure folly, the most popular explanation for the insanity of the Great Credit Bubble is greed. There is a great deal of truth in that but there is another emotion which I thought at the time might have played a role. Fear.
There was some cheer for Irish business after British prime minister Theresa May's speech, as sterling rocketed to its biggest daily gain since at least 1998 to the benefit of Irish exporters and those competing with British imports.
THE thought occurs: would there have been a different reaction to that recent report on the implications of Brexit for Ireland, had it come from a UK Senate rather than the House of Lords?
Even the longest of lives must come to an end, but the business of government goes on forever. The three great issues to which TK Whitaker devoted his life remain with us. We can only wonder how much worse they would have been without him.
NEW Year, they tell us, is a time of hope - but there is a strange feeling in the air. For 2017, the dominant feeling is not hope, but foreboding - a good old Saxon word for fear of what the future may bring.
WHAT'S in a name? Quite a lot, it would seem, if the names in question are 'Cosmo' and 'Hermes' - the acronyms for the new and old models of the economy used by the Economic and Social Research Institute (ESRI).
IT is difficult to find a direct connection between rising inequality in Britain and the anger which produced the Brexit vote, a learned professor said last week. Perhaps it is, but my goodness, it is tempting to try.
COULD it happen here? That was the question after the Brexit vote and, especially, the Trump victory. To which the answer might be: it already has. Like Tolstoy on marriages, every country shows its unhappiness in its own way.
JUST now, I feel a bit like the guinea-pig I recently wrote about in that experiment, faced with 19 people denying the blindingly obvious and wondering if he can possibly be right. I am talking, of course, about the Arlene Foster question.
There are almost as many explanations for Donald Trump's election victory as there are votes in the US electoral college. One of the less obvious ones, which has history on its side, is that Mr Trump is part of the 'fat tail' of the global financial crisis.
HAS it come to this already? The latest Exchequer returns on the public finances drew warnings from analysts that the borrowing targets this year might not be achieved.
To paraphrase golfer Ben Hogan, if it seems obvious, you're probably wrong. That could be the mantra of the fashionable subject of behavioural economics - to an extent that is beginning to dismay some of its proponents as they venture further into this looking-glass world.
A figure which always surprises is the one which says Irish households have €100bn (that's not a misprint) on deposit in the banks. Aren't we all supposed to be bust?
One good thing to be said about this week's Budget: it made a 97-year-old acquaintance of mine laugh. He had just been told that his pension would go up by a fiver a week, but not until March. When you're that age, and not very well, that's funny.
ONE of life's little pleasures is watching for glimpses of my younger self in episodes of RTE's 'Reeling in the Years'. In a recent one covering 1974, I knew I would not see myself, but I knew exactly where I was.
ON account of misreading the timetable, I spent part of my holiday sitting in a small Italian station waiting for a train that was not running.
NOW class, let's get back to the basics. First, the annual Budget cannot be an annual exercise in tax cutting. Not unless you believe in a smaller state and, as we know, absolutely nobody believes in that.
AMID the encircling gloom, the employment figures continue to shine. So much statistical fog has descended on GDP, wealth, and even government finances, that it is worth remembering that the jobs data is among the more reliable.
THIS will be a Budget like no other - irrespective of who gets it through, or when exactly. Not even 1981-82, when there were three Budgets, from different governments, will quite compare. It is all about politics, then and now. The minority administrations of Charles Haughey and Garrett FitzGerald failed in efforts to get TDs who were not in the government to support their Budgets. Now, the efforts concentrate on Independents who are inside the Cabinet tent.
William or James; Wellington or Napoleon; King or Kaiser? The story of Ireland often seems to be that of a long-suffering pawn caught in the struggles of great powers. It feels a bit like that again.
AS they themselves would say, the Americans have skin in this game. Tens of billions of dollars worth of skin. But there may also be genuine puzzlement on the other side of the Atlantic about the ramifications of EU state aid rules in the wake of the Apple ruling.
WELL, that didn't take long. Just the other week, the Central Bank published data showing that private sector debt as a percentage of GDP had fallen by almost a quarter. Leprechaun alert!
The most distressful country that ever yet was seen. Even a brief acquaintance with school history - when there used to be school history - would be enough to realise that Ireland's story was a sad one.
It's regime change, as well as a change of address, at the Central Bank - but how different will things be? They are fitting out the new headquarters down by the docks but fitting out a new mindset is a more challenging affair.
I see they're still working on Charlie McCreevy's "individualisation" of tax allowances, 15 years on. When he brought it in, as a response to a Supreme Court ruling, I was among the small minority who thought it was fairer that one person should pay more tax than two people earning the same amount of money between them.
A funny thing happened on the way to the merger of carmakers Daimler-Benz and Chrysler in 1998. When the highly profitable German company re-filed its accounts in line with the rules of the US Securities and Exchange Commission, it posted a loss. Nothing else had changed, there was no jiggery-pokey; just accountancy.
I moved from Belfast to Bray in 1976 and remember following the furniture van containing all my worldly goods, ready to present a list of them to Irish Customs.
'I have not become the King's First Minister in order to preside over the liquidation of the British Empire," Winston Churchill told the US Congress in a famous speech. How much more important, then, not to become the Queen's First Minister to preside over the liquidation of the United Kingdom?
SOMETHING else was happening in Europe last week as well as the UK referendum to decide the future of Britain in the EU, Ireland in the EU, and perhaps of the EU itself.
The Irish government's task is just about the only thing which is clear after the map of Europe was dramatically redrawn,
RARELY has the case been put so bluntly. The Association of Garda Sergeants and Inspectors has made it plain that they will not co-operate with the upgrading of the force's equipment unless their pay claims were dealt with first.
Asworthless as a Continental. Americans still say that, apparently, although few may realise they are talking about the paper dollars printed to pay for the War of Independence more than 200 years ago.
AFTER all this time, I think I am entitled to a little self-indulgence. And so we come to "Water quality and recreational angling demand in Ireland", published in the 'Journal of Outdoor Recreation and Tourism'.
If economics is the science of choices, politics may be said to be the science (or art) of making choices. In which case, the housing crisis poses the ultimate political challenge.
THE winter of our discontent. The torrent of Shakespeare to commemorate his 400th anniversary is full of reminders of how many of his phrases have come down the centuries into everyday use .
The more things change, the more they stay the same, someone once wisely said. The agreement to support - up to a point - a minority government led by Fine Gael is indeed a historic change. The contents of what it intends to do look wearily familiar.
THE politicians were off playing game of thrones, and the voice of the mandarin was heard in the land. That at least is one interpretation of last week's Spring statement on the budget outlook.
Green shoots are at last appearing in the garden, after another cold spring caused by global warming. Pottering among the statistics shows sturdy plants in the economy as well, but worries about the climate.
Back in the Sixties, Irish management sucked. And if it does not suck quite so badly today, a lot of credit must go to Ivor Kenny, founder of the Irish Management Institute,who died last week at the age of 85.
IT sounds like the worst kind of upper-class snobbery and condescension: British prime minister Stanley Baldwin's comment that the challenge was not so much making the world safe for democracy, but the more difficult one of making democracy safe for the world.
SUPPOSE the British trade union movement - not to mention Jeremy Corbyn's Labour Party - had decided to support Brexit? The result would have seemed a foregone conclusion. Even Scotland might vote to leave.
IT is a sign of how far politics has fallen that the new-found enthusiasm for Dáil reform was greeted with near universal cynicism. Yet a genuine change to the way things are done in the national parliament may be the only chance of getting through the next few years without serious economic and political damage.
Beware the pub questioner. Surprisingly often, they ask very good questions, and they expect a quick answer. "Why doesn't the ECB just give me the money - I'd know how to spend it," was one such the other week, albeit delivered a trifle truculently.
WE are not going to have any clichés about crying, but we are going to mention Argentina. As you may have seen, the country was forced to cut a deal with a group of its creditors after years of litigation over (cliché alert) the burning of their bonds.
WHATEVER happened to the Misery Index? This was famous for 15 minutes, back in the day, based on a claim that adding unemployment and inflation together was a good guide as to whether governments would get re-elected.
'Good luck: sorry to leave it in such a mess," was the marvellous comment of departing British Chancellor of the Exchequer Reginald Maudling to his successor, Labour's Jim Callaghan, after the Conservative defeat of 1964.
Michael Lewis - the only man who can make a collateralised debt obligation funny - must be having a right old chuckle. Just as the film based on his book of the same name, 'The Big Short', is showing in cinemas, the financial markets are having a Big Wobble.
LETTERS to the Editor are the very place to think the unthinkable and say the otherwise unsayable. That is why they have so many readers ( a lot more than this poor column).
Come back Charlie McCreevy, all is forgiven. Well, almost all. At least you could understand what Mr McCreevy meant. Well, most of the time.
Why? That is the question. There seems to be general agreement that the banking inquiry, despite its best efforts, did not get much beyond the well-trodden path of what happened. As to why, we are little the wiser.
THERE was a bit of fuss the other day over claims that the IMF (International Monetary Fund) failed to predict a single one of the recessions around the world since 1999. But actually, it doesn't say on the tin that it will.
Watched any 'EastEnders' recently? Everyone on the Square now seems to be a murderer, rapist, thief, adulterer or spouse-beater. So much so that there is talk of bringing the whole 30-year farrago to a close. The reason is simple enough. When a soap opera has been running for decades, the scripts have to become ever more dramatic to maintain audience interest - or perhaps even scriptwriter interest. Something similar seems to be happening to Irish election campaigns.
COME back interest rates, all is forgiven. Hard though it may be to believe now, one of the arguments in favour of joining the euro was that it would remove the small but significant risk difference between Irish and British interest rates. That, you will have noticed, has been the least of our worries.
Always read the small print. This is especially true of the annual Budget. Some of the print is so small that only experts can comprehend it, and they will tell you that some important stuff is not in there at all.
WITH bated breath, we await the report of the Oireachtas Banking Inquiry. Although, truth to tell, it was all to do with the Central Bank and Financial Services Authority. Note the two functions in a single name. We wait to see if the report can shed some light on how both functions failed so dismally.
'TAPIOCA futures weaker'. Bet that made you sit up and take notice. In fact, it was an example of how not to do it in a 'Financial Times' newsroom campaign many years ago to improve the standard of headlines.
THE former West German Chancellor Helmut Schmidt, who died recently, once delivered the greatest stop-em-dead line I ever came across in a broadcast interview.
"And faded through the brightening air."
AN Ancient Greek dramatist could have made something of the Irish banking tragedy. The banking system failed partly - perhaps largely - because its regulators were obsessed with protecting it. (Enter Chorus).
IT seems Henry Kissinger never did ask, "If I want to phone Europe, who do I call?" but your correspondent did once say, "If I want to report Europe, where do I point the camera?"
Is it deja-vu all over again? Budget Day would have brought a tear of nostalgia to the driest eye. Two billion euro of spending increases, mysterious fiddling with debit card fees, and threats of strikes from none other than the train drivers and teachers. I could almost feel my hair turning black.
You have the advantage of me. You know what was in Tuesday's Budget whereas, as the time of writing, I do not. Still, one must make the best of any situation and there may be no harm in looking at the run-up to Budget day.
Size matters; especially when it comes to public infrastructure. Across the water, they have just announced a £38bn (€51bn) programme to electrify rail lines through the midlands of England and across the Pennines. That's about the same as the entire six-year capital programme announced by the Government this week.
ALWAYS expect the unexpected, the old advice runs. But what if the unexpected does not come? Always finding the expected is a very dull business.
THE thing about the health service, one can't help but notice, is that it is always two billion short of being really good.
ANOTHER set of stunning statistics, this time on employment, and again the question is asked: what makes Ireland so different? Problem is, the answer keeps getting longer.
A rose by any other name may smell as sweet, but calling a nettle a rose does not make it so. There can be a lot to a name.
Did you know that the idea of a constitutional opposition to government originated in a family bust-up between Britain's King George I and his son? No, neither did I.
We had a visitor from a Beijing think tank the other week. She wanted to know the reasons behind the rapid Irish recovery from such a horrendous crash. If only she'd come last week!
THE Organisation for Economic Cooperation and Development is not known for its pithy sayings. Yet, in just 30-odd words, it has managed to summarise all the dangers of belonging to the single European currency.
The mayor of Calais got it right, perhaps. In an interview a few months ago Natacha Bouchart gave her opinion as to why so many migrants were desperate to get across the Channel to Britain. One big reason, she thought, was the UK system of tax credits.
IN that hilarious depiction of Irish mores, "McCarthy's Bar", one scene describes the reactions of different nationalities at a traditional music session. While the Americans took photographs and the Swedes took notes, the Irish stood at the back, talking about property prices.
NOT too many people have a curve named after them. Those who do are guaranteed a certain kind of immortality. Especially if the curve involves taxation. This is the case with the Laffer curve, named after the US economist Arthur Laffer. It portrays government revenues rising with higher taxation only up to a point. After that, revenues level off and eventually fall as taxation reaches very high rates.
The show may not be over until the fat lady sings, but some very high notes are being sounded in the operatic farce/tragedy that is the Greek crisis.
KNOW who David Cameron reminds me of? Bertie Ahern, that's who. It may seem an odd pairing, the Eton-educated toff and the lad from Drumcondra, but both are prone to the Scarlett O'Hara syndrome.
ECONOMIC policy can sometimes seem like sub-atomic physics: as soon as one observes something, the something changes. Not to mention the uncertainty principle.
Forensic readers of this column might think that last week's effort was inspired by the new book from David Cameron's former chief strategist, Steve Hilton, lamenting the power of vested interests in modern democracies.
I was once berated by an official in Toronto airport, who kept gesticulating at my glass of beer and a blue line painted on the lounge floor. I gathered eventually that it was forbidden to drink on the wrong side of the line.
IF I'd known the bus was coming, I'd have waited. Just a couple of weeks after trekking through the undergrowth of low wages and living wages, along comes a shiny new vehicle from the OECD with "Minimum Wages" on its destination blind.