The government has been celebrating Ireland’s recent exit from the Troika bailout and have proclaimed that Ireland is now on the road to recovery. The Taoiseach addressed the nation to celebrate the regaining of Ireland’s economic sovereignty. But are we out of the woods yet? Is Ireland facing a new dawn that leaves the nightmare of the recession behind or is it only a mirage of false hope while we are still stuck in the mud? Continue reading “On The Road To Recovery Or The Road To Nowhere?”
Europe is in the grip of austerity fever where all governments are convinced that reducing the budget deficit must be their main priority. However, despite the strong consensus, little thought has been given to whether or not it will work. Some economists have proposed that austerity could improve the economy if businesses and consumers believe are impressed by the government’s action and begin spending of their own. This is called “expansionary austerity” or “expansionary fiscal contraction”. Subsequent research has discredited all examples of expansionary austerity, with Ireland in 1987 being the only exception. But Ireland is no poster child for austerity, but just another example of the harm it does. Continue reading “Ireland Is Not An Example Of Expansionary Austerity”
(This is the original draft of an article I wrote for the University Observer. A counter argument was also written.)
Whenever someone tells you there is no other option, don’t believe them. There are always other options and when people pretend otherwise its usually because they want to shut the debate down. So when Michael Noonan grimly announces that we have no choice but to implement austerity, we shouldn’t blindly accept this. There is always an alternative. Continue reading “Austerity Isn’t Working”
At the moment the government is trying to negotiate a deal to best cut public sector wages. However, any such deal will only make the recession worse without reducing the deficit. Here is a guest blog I wrote on the topic.
– Robert Nielsen discusses the ongoing dispute over the Croke Park II proposals, and why cutting wages is always a bad idea.
At the moment there is a great deal of controversy over the Croke Park Deal. In essence the government is trying to cut the wages of public sector workers while the public sector unions are opposing this. Regardless of the politics of the agreement, cutting wages is bad economics. It depresses the economy, worsens the recession and doesn’t even achieve its objective of reducing the deficit. The union membership was absolutely right to reject the Croke Park Deal and the government must completely reconsider its plan of action, because the current one isn’t working.
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A guest blog I did for a new group, Irish Student Left Online, on the Anglo Promissory Note. Its a specifically Irish issue, but basically a private bank made reckless gambles and was about the go bankrupt when the Irish government bailed it out. It will cost 30 billion euro to wind down the company (as in return for 0 benefit). It been a huge problem figuring how we should pay this and this week the government finally got an agreement with the ECB to delay repayments for 30 years. I discuss whether or not this a good deal.
In his debut for the ISLO Robert Nielsen goes through the bizarre and tragic nature of the recent “deal” on the Promissory Notes. Robert blogs over here normally.
Whenever discussing the banks people often preface their comments by saying that they don’t know much about economics. It is assumed that the bank bailout only seems absurd due to a lack of economic knowledge, that in actual fact the government is following well-established economic principles. As an economics student, let me tell you that nothing is further from the truth. There is no economic logic or theory behind the government’s
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Economics is divided into two sections, micro (focusing on individuals) and macro (focusing on the whole economy). However in universities the emphasis is heavily on micro to the extent that macro is often seen as simply micro on a larger scale. This is fundamentally wrong and ignores several points.
This focus ignores the fact that the best option for the individual is not always the best option for society as a whole. Continue reading “Macro Over Micro”
It is often claimed that this recession is hitting all of us. It is said that the rich suffer just as much as anyone else, if not more. It is argued that we all must make a sacrifice as we are all in this together. However this simply isn’t true. In fact this crisis is resulting in even further increases in the gap between rich and poor. Inequality and poverty are rising to even higher heights. Austerity is making the poor suffer the most while leaving the rich untouched. Quite simply the rich are getting richer while the poor are getting poorer. Continue reading “Rich Get Richer – Poor Get Poorer”