by niamh on February 1, 2010
I posted recently on The paradoxical politics of credible commitment, noting the excellent analysis of Gordon Brown’s politics by Sebastian Dellepiane. Â He argues that the Labour government did not make the Bank of England independent simply in order to defuse City suspicions of them. This self-binding policy was also in fact enabling, because it made it possible for Brown to adopt a classic Keynesian economic strategy by about 2000.
The Euro started out as a self-binding credibility-gaining mechanism for Eurozone member states. But the Euro also turned to have an ‘enabling’ side to it. It contributed to new kinds of instability by facilitating the extension of cheap credit and by permitting increasingly risky lending practices to spread throughout the European financial system, in Germany and France as well as in the weaker peripheral economies.
This has led me to think some more about the relevance of the logic of credibility gains in the current European crisis.
The self-binding austerity politics now under way in the Eurozone also has some paradoxical features. The crisis has produced an explosion of fiscal deficits and an accumulation of sovereign debt. The ECB favours fiscal austerity to restore stability, and so does German public opinion. This means that every other member state must adjust to low demand conditions and domestic deflation. But while Gordon Brown’s self-binding monetary policy proved to be enabling, Eurozone governments’ self-binding fiscal policy might be seen as self-disabling, because it involves commitment to a strategy that may prove self-defeating. There are two reasons for this.
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by Henry Farrell on January 21, 2010
If I’d had time last week to write about Irish politics, I’d have blogged about Bertie Ahern’s success in getting the taxation authorities not to make him pay any taxes on his forthcoming autobiography. Creative works enjoy an exemption under Irish tax law. Both Alex Massie (who reveals that the former Taoiseach’s full name is Patrick Bartholomew Ahern – news to me) and Fintan O'Toole are quite upset about all of this. I’d have expected O’Toole to be more forgiving; after all, in his recent book (forthcoming soonish in the US unless you have a Kindle, in which case it’s available already) on feckless politicians, property developers and the travails of the Irish economy, O’Toole describes Bertie as:
“a character in a long-running soap opera. Such characters are meant to be people like us, except that an absurd number of dramatic things happen to them. Their marriages break down, they have complicated, drawn-out love affairs, their children marry pop-stars and have twins, or become famous novelists overnight.
Surely, the autobiography of a fictional character is fictional itself by definition, and hence as creative as creative can be?
More to the point: O’Toole’s book, _Ship of Fools: How Stupidity and Corruption Sank the Celtic Tiger_ is highly recommended. It is written in haste and _saeva indignatio_ and hence not as polished as his work usually is, but is very strong in both analysis and indictment. Since Daniel has already promised a review (and what could possibly go wrong with such a promise?), I won’t write one here, instead making two short points. [click to continue…]
by Henry Farrell on December 10, 2009
I’m reading Fearghal McGarry’s forthcoming book on the Easter Rising at the moment, and was reminded of an interesting bit of history – the British Conservative party’s advocacy of armed rebellion against the government in 1912 over the prospect of Home Rule for Ireland.
The Tory leader, Andrew Bonar Law – speaking at Blenheim Palace in July 1912 – openly alluded to the threat of civil war, describing the [British] government ‘as a revolutionary government which has seized by fraud upon despotic power’, and declaring his intention to support Ulster’s unionists in using ‘all means in their power, including force’ to prevent Home Rule. Nor was this mere posturing: leading Tories, including Walter Long and possibly even Bonar Law – were closely involved with the financing and running of guns into Ulster for use against their own government. Whether Bonar Law’s militancy was motivated by a desire to consolidate his own leadership and undermine the Liberal government rather than fervent loyalism remains a matter of debate …
It seems to me that this episode – in which Conservatives, who usually conceive of themselves as the law and order party, actively advocated rebellion against their own government and helped smuggle guns – has fallen out of historical memory in the UK. Perhaps I’m wrong, or just not included in the right discussions, but my strong impression is that the British record in Ireland’s War of Independence (the Black and Tans and so on) is reasonably well known, and still sometimes discussed. The run-up to it – and the direct advocacy of armed resistance by one of Britain’s major parties – not so much.
by Henry Farrell on December 10, 2009
Brian Lenihan (Ireland’s finance minister) puts the best face he can on the external limits constraining Ireland’s economic decision making in his budget speech today:
In the recent Lisbon referendum the Irish people reaffirmed our place at the heart of Europe. This was the right decision for our economy, for our future and for our children. The single currency has provided huge protection and support to Ireland in the current crisis. It has prevented speculative attacks on our currency and provided funding to the banking system. But, membership of monetary union also means devaluation is not an option. Therefore the adjustment process must be made by way of reductions in wages, prices, profits and rents.
As a small open economy, Ireland would probably have devalued to help cushion the shock, if it had not been an EMU member with no effective control over its currency. Given EMU membership, devaluation (and exit from the system) would probably have been a very bad idea. Ireland is hoping to make the best of a bad job, adding levies, increasing taxes and making swingeing cuts to public sector pay so as to shore up its fiscal position.
The problem is that all the fiscal rectitude in the world cannot protect you from contagious crises of confidence.
One of the “signals” that could instigate a sudden stop in Ireland is a sudden stop somewhere else, particularly somewhere with regional or trade connections. This is why bad news for Greece is bad news for Ireland. If Greece hits a sudden stop, Ireland will wobble, and will be the next in line for a sudden stop in Europe. There is another simultaneous game being played: the ECB and its bailout policies playing a reputation game against member sovereign governments and their fiscal discipline. Again, the Greek situation is bad for Ireland. … Ireland has done everything (so far) that the ECB could reasonably ask of her to impose fiscal discipline and restore competitiveness. If it were only Ireland at risk of a sudden stop, the ECB could be very accommodating about bailout assistance. The ECB would not let a well-behaved minnow like Ireland cause market turmoil. If a sudden stop was brewing and Irish bond yields rocketed up, the ECB could easily mop up any excess of Irish sovereign bonds, killing the run, and later tell some convenient story about why this did not violate EMU no-bailout guidelines. On the other hand, we now know that the Greek government has deliberately and substantially falsified its national accounts over recent years. … no political will to impose any meaningful discipline on tax and spending … adherence to the Growth and Stability Pact is a charade. If the ECB bails out Greece, all semblance of future fiscal discipline throughout the Euro zone is lost. … How can the ECB bail out Ireland if it refuses to bail out Greece?
Greek government bonds tumbled today. It may very possibly be that Ireland is in the worst of both worlds – suffering the unmitigated agonies of fiscal rectitude imposed by the EMU’s straitjacket, but with at best highly uncertain prospects of support in the event of a new crisis of confidence. Brian Lenihan won’t be sleeping well the next couple of weeks.
by Henry Farrell on October 29, 2009
Just after Mary Robinson announced that she was not interested in the EU Presidency, former Irish Taoiseach and outgoing EU ambassador to Washington John Bruton has put his hat in the ring. I know him and like him enormously (he’s a very decent right winger), so I won’t speak to the merits of his candidacy on grounds of manifest personal bias. But if I was a betting man (and there were a contract at Intrade), I’d think him well worth a considerable flutter. He fulfils the informal desiderata (Christian Democrat from a small state), but even more importantly seems like a very plausible compromise candidate. The Germans are likely to veto Blair, while the UK is almost certain to want to veto overly enthusiastic federalists like Jean-Claude 'I am not a dwarf' Juncker and Guy Verhofstadt. Bruton is plausibly acceptable to both sides – he is pro-European enough to keep the mainlanders happy, but very well liked in the UK. At the moment, I’m not seeing any other declared candidate who could plausibly get a consensus behind him or her. I’ll try to write more on the candidates as the politicking continues …
by Henry Farrell on October 2, 2009
So the polls are open in Ireland for the Lisbon Treaty Mulligan referendum. Early reports suggest that more people are voting than the last time in Dublin, but that turnout elsewhere in the country is very low. I’m predicting a win by somewhere in the 6%-8% range (more predicated on ‘No’ voters being discouraged and not voting, than on any great sense of positive enthusiasm for the referendum). Also worth noting in passing that Wolfgang Munchau who suggested last year that the Irish could (and perhaps should) be kicked out of the EU for their impertinence in voting No the first time around now seems to have gone quite cold on the Treaty himself. He fails to tell us whether major European member states are monitoring his shifting beliefs against the likelihood that they might soon have to pull out of the EU and reconstitute themselves in a new organization that would specifically exclude Wolfgang Munchau. Perhaps his column next week will reveal more – in the meantime, feel free to speculate about the vote, provide updated information, opinions etc in comments.
Update: Looks as though I seriously underestimated the swing – the Treaty passed by a 17% margin.
by Henry Farrell on September 19, 2009
One of the odd and not-very-well-known-by-non-Irish-people things about Ireland is that every day, at 6pm, the main television station broadcasts the Angelus – one minute precisely of church bells ringing – for people to pause, reflect (and at least according to the original intentions of those who instituted it), pray.1 Back when I was growing up in Ireland, and the vast majority of my compatriots claimed that they went to Mass every week, the Angelus bells were accompanied by still shots of paintings of the Holy Family. As the country began to modernize a bit in the 1980s and 1990s, the Angelus gradually became more pluralistic, titillating religiously adventurous viewers with the occasional picture of a Russian Orthodox icon or whatever. But what to do after the supplanting of Roman Catholic hegemony by a bog-standard West European post-religious society? The Irish Times has an interesting short article on the politics of the Angelus in the modern era.
bq. THE ANGELUS will from next Monday be changed – though not utterly. Under a revamping of the evening pause for prayer on RTÉ One television, the gongs will remain the same. …the same ones as have been heard since the Angelus was first broadcast on RTÉ radio in 1950, and which originated with the bells at Dublin’s Pro-Cathedral … seven “episodes” in a new Angelus mini-series of visual reflections … oblivious calm amid the hue and cry … while he sketches an image of a pair of praying hands. … mother in Sixmilebridge, Co Clare, as she polishes a memorial stone to her drowned son … grandparents Tess and Pascal Finn feeding fussy swans on the Shannon at Limerick and Enniscorthy fisherman John Keating, who is shown out at sea in his trawler … Namucana Nyambe from Zambia as she gazes contemplatively towards the Phoenix Park … grist to the mill for those avid letter writers who have been campaigning for years to get the Angelus taken off the schedule of the State broadcaster.
It’s interesting how little bits of the previously dominant religious culture can weather the storm of progress – but only through the transfiguration of their content. If the Angelus didn’t already exist it would never be instituted in a society like contemporary Ireland – but since it does exist and would be difficult to get rid of without upsetting people (still-believing Catholics; once-were-Catholics who fancy they would miss it if it were gone) it has been gradually transformed instead into something that maintains the form of the original (still the old church bells), but few of the original religious valences.
1 Italy’s _Rai Uno_ has something similar as I recall (although timed not to interfere with the celebration of the true national religion, soccer).
by Henry Farrell on April 29, 2009
From the Irish Times today …
IRELAND IS set for the sharpest fall in economic growth experienced by an industrialised country since the Great Depression, the Economic and Social Research Institute (ESRI) says in a report published today. The institute’s spring quarterly economic commentary estimates that gross national product will fall by 9.2 per cent this year. “Our forecasts suggest that Ireland’s economy will contract by around 14 per cent over the three years 2008 to 2010. By historic and international standards this is a truly dramatic development. “Prior to this the largest decline for an industrialised country since the 1930s had been in Finland, where real gross domestic product declined by 11 per cent between 1990 and 1993,” according to the ESRI.
by Henry Farrell on April 2, 2009
The NYT
the island of saints and scholars … The next parish over, they say … is Boston … the wellspring of poets and balladeers as advertised: those emerald fields, those ruddy-cheeked fishermen warming pub seats, a land of stone and cold wind that produced a lyrical people and a music embraced more than ever by the young. … Every village that had seen nary a rock wall or a cottage window unchanged suddenly had a cul de sac of insta-homes and a half-dozen O’Mansions. Anyone with a mortgage could get rich in little more time than it took for a head of Guinness to settle. … wonderfully brooding town, where David Lean filmed “Ryan’s Daughter,” the sod was peeled back for the worst kind of Southern California housing developments. … beer-soaked backwater … “I left a godly land of broke but merry alcoholics and came back to a place where people who used to dig potatoes were buying luxury apartments sight unseen and driving Porsches.” … marvel at a people burning peat to stay warm against blustery Atlantic winds. … empty new homes tell a story of greed.
Fill in the blanks yerself. In all fairness, a couple of the choicer phrases were quoted by the author from other people’s articles, but others weren’t. I suspect that the author of this piece was especially proud of ‘O’Mansions’ and the Guinness-head-settle as a unit of duration. He shouldn’t be.
by Henry Farrell on March 31, 2009
I’m not particularly keen on the current Irish government, but this seems a bit much:
Ireland may need “new faces in Government”, an analyst with debt ratings agency Standard & Poors said this morning. Frank Gill, speaking a day after the agency lowered Ireland’s credit rating, also said Ireland had a “very low” chance of defaulting on its debt during an interview with Newstalk radio this morning. Mr Gill said a change of Government may be required in an effort to stabilise the debt to gross domestic product ratio. That ratio may rise to above 9.5 per cent, according to the Government, more than three times the European Union limit. Ireland has lost its prized “AAA” credit rating from Standard & Poor’s, which yesterday downgraded its outlook for the Irish economy, blaming the deterioration in public finances. In a move that will make the cost of Government borrowing more expensive and put further pressure on the economy, Standard & Poor’s lowered Ireland’s rating from AAA, the top rating possible, to AA+.
I wouldn’t have thought that this was an especially opportune moment for credit rating agencies to start throwing their weight around given their major contribution to the ongoing crisis, but even in normal times, this would have struck me as serious over-reach. Credit rating agencies are purely private bodies, with an awful lot of political power. In theory, they impartially pronounce upon the perceived riskiness of lending to particular debtors, putting money in particular deals and so on. In practice, their decisions often prove to be quite political. But rarely as political as this. I don’t think that this comment can be interpreted as anything but a statement that Standard and Poor’s willingness to improve Ireland’s credit rating is dependent on the Irish Dail and Irish voters kicking the current government out. That’s a very dubious – and very political – action for a purportedly neutral and technical body to be taking.
Update: Thanks to nnyhav in comments for pointing to this later story.
Reacting to S&P’s decision to cut the Republic’s rating, economists and market analysts yesterday homed in on its concern that there would not be a credible plan for the public finances until after the next election. Mr Gill told The Irish Times that the statement was not meant to question the State’s leadership, and simply reflected the challenge facing the Government and the uncertainty surrounding the banks. He also stressed that a AA+ rating was still broadly positive. “That is a very high rating and this suggests an extremely low probability of default,” he said.
I originally thought that this looked like a walkback rather than a clarification and said as such – then I saw that the Irish Times had changed their original story (without saying that they were doing this) to include the full quote which appears considerably more ambiguous than the original story implied.
Mr Gill said a change of Government may be required in an effort to stabilise the debt to gross domestic product ratio.
“It’s likely that for there to be a buy in into what are going to be inevitable tax hikes in order to stabilise the debt to GDP ratio, you are going to need new faces in the Government. This is typically the case in the aftermath of an economic crisis,” Mr Gill said
The GDP ratio may rise to above 9.5 per cent, according to the Government, more than three times the European Union limit.
by Maria on March 17, 2009
With the day that’s in it, I have a few random complaints to lash together into a not-too-coherent post. First off, it sucks to be Irish in the US on St. Patrick’s Day. Sorry, I know it’s churlish, and on my better days I agree that all the enthusiasm and interest and desire to party is actually quite sweet, but there it is. If I have to smile politely at one more person telling me they’re Irish (really? whip out your passport, then.), giggle appreciatively at one more crap – invariably Scottish – accent, or spend one more penny listening to Loreena McKinnit or some similarly bogus disneyfied version of Oirish music in the ladies’ loo of the Culver City Radisson where I am already suffering through a full-day operations planning session, I may stab someone. I know the day is not about celebrating Ireland, but about Irish Americans, who are a fine bunch of people now that their Noraid-supporting and parade-homophobia days are behind them. Another thing, no one I have ever known in Ireland has ever eaten corned beef. Ever. It’s the most Enid Blyton food there is, and not remotely Irish. Just saying.
Secondly, I groaned out loud when I heard on the radio that our current Taoiseach, Brian Cowen, was in the White House to meet President Obama. Again, I’m not saying I’m proud of it, but my immediate response was ‘Oh no, once he meets Biffo, Barack won’t think we’re cool any more!’. But I’ve got to hand it to Reuters. They’ve put out a picture of the ceremonial handing over of the green muppet skin where President Obama looks an even bigger nob than Brian Cowen.
Finally, Bono. [click to continue…]
by Henry Farrell on February 21, 2009
Americans who think that their economy in bad shape should be glad that they don’t live in Ireland, where the economy seems to be completely melting down. Matthew Engel has a grimly entertaining article on the collapse of the housing market, which has a bit too much stage-Irishry for my liking, but gets at the underlying political economy of the final years of Ireland’s economic boom.
the desperate developers of one estate, Athlumney Wood, did what practically every retailer in Ireland is doing: they held a sale and slashed prices by half. Last week they got rid of 25 properties. Semi-detached houses that once touched €330,000 ($416,000, £291,000) sold for €175,000. … Unlike anyone else’s, the Irish boom was essentially construction-led, and places like Athlumney Wood are the new Ireland. …
Indeed, it’s easy to believe that the cute-hoor party, covering politicians, builders, financiers, bankers, senior civil servants and every chancer in Christendom, has been running the place for their own benefit for years. Here, everyone who matters knows everyone else. But careful observers are more specific in their analysis. “There was an alliance between Fianna Fáil and the property developers,” says Jane Suiter, who teaches politics at Trinity College, Dublin. “The government saw light-touch regulation as giving Ireland competitive advantage. And as far as Ahern was concerned, the biggest multiplier for votes was construction jobs.”
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by Maria on January 2, 2009
I’m sorry to say that longtime Dublin independent TD, Tony Gregory, has died. Apparently, he’d had cancer for some time. Despite being a thorn in the side of practically every other politician and civil servant he encountered, Tony Gregory is universally and warmly praised by them in today’s reports.
Gregory’s extravagant pork-barreling in the early 80s was much vindicated by his decades long commitment to one of the poorest parts of Dublin. My generation probably remembers him best as the man who refused to wear a tie in Dail Eireann. Obliging little conformist that I am, I remember my ten year old self wishing he’d just wear a tie so he could get on and do things for his constituency. Later, I realised that it was precisely because Tony Gregory refused to roll over and play nicely that he was able to get things done and command voter loyalty for decades in one of the most alienated parts of the country.
by Henry Farrell on December 19, 2008
The Irish Times has the story, although it concentrates on his not-especially successful political career rather than his intellectual contribution. I found his later work (both books and newspaper journalism) to be very nearly unreadable, less because of its sometimes reactionary politics than because of how badly it was written. There was plenty of choler and spleen, but little real humour. But his earlier books – I’m especially fond of _States of Ireland_, which really remade the debate over Irish national identity – are still a joy and a delight to read. His best writing was liberal in the most expansive sense of that term, clearly thought through, open to its own contradictions, generous where generosity was warranted, and witheringly accurate where it wasn’t (he had a near Galbraithian facility for cutting through the bullshit with a pungent description).
by Daniel on November 28, 2008
As part of a minor project aimed at eliminating the cliche “the very real concerns of the white working class” (the latest weaselly codeword for people who want to gain the political benefits[1] of playing anti-immigrant politics while avoiding any of the costs) from British political life through a campaign of sustained mockery and invective, I had an article up on the Guardian blog last week. A digression that I probably should have edited out of it, but in fact liked so much that I not only left it in but am posting it here now, concerned the sunset of what was once an important subsector of the British social work profession in places like Kilburn and Camden Town:
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