Minister Donohue, Stephen Donnelly speaking at DEW conference

A quick update on the annual DEW Conference. As noted a couple of weeks ago, the conference takes place in White’s of Wexford on September 22nd and 23rd. The post linked above outlined some highlights (at least in my own opinion) based on the programme as it was at the time.

An updated programme is now live at this link [PDF]. There are two further updates to the programme that readers may be interested to know:

  1. Firstly, Minister for Finance Paschal Donohue will be giving the William Petty Keynote on Saturday evening, before the conference closes. He will speak after the Ireland in 2040 session, so it is likely he will address the regional spread of economic activity and the related topic of spending on infrastructure.
  2. Secondly, Stephen Donnelly TD will be giving the Cantillon Lecture on Friday afternoon. Stephen is the Fianna Fail spokesperson on Brexit and his lecture will be on the same topic.

For more on the conference and to buy tickets, please visit dublineconomics.com. Please note that, due to significant demand, there are no longer any rooms available at White’s. There is instead limited availability at the Maldron.

(Observant readers will have noticed that both named lectures are after economists with strong Kerry connections. Particularly in this, the 40th Annual DEW Conference, this is in recognition of the long association it has had with Kerry and with Kenmare in particular.)

27 thoughts on “Minister Donohue, Stephen Donnelly speaking at DEW conference”

  1. Does Morgan Kelly never attend these conferences? And maybe explain why his predictions for the Irish economy in general. and housing demand in particular, have proved to be such hogwash?

      1. I think few will disagree that John has proved to be the most accurate forecaster on this site and indeed as far as I can tell more accurate than anyone else in any other media. Sure its a pity his views do not have a wider circulation but perhaps that could be down to “the herd mentality” that Claus Regling identified back in the day and an unwillingness to believe that there could be any light at the end of the tunnel by many. I think his point about Morgan Kelly is well made but a more thorough analysis of all economic predictions and commentators together with an examination of the media might help us avoid a similar disaster in future.Why did so few predict the recovery and thus contribute to our current housing and infrastructure deficits? Were people over pessimistic and could they still be? We need people like John now more than ever.

      2. I didn’t whine for a decade about the number of houses being built. He did.

        He repeatedly attacked FF for building too many houses, he claimed they weren’t needed, he claimed they were only built because of corruption, he predicted that Ireland wouldn’t need to build any more houses for decades, he predicted that Ireland would need to knock down more houses than it built in the next decade, he predicted that that house prices would fall by 80%, he predicted that the economy faced total ruin, he predicted that Ireland was facing famine-levell emigration and depopulation, he predicted that government debt would hit 360bn euros, he predicted that Ireland would go bust, he predicted that the ECB would take over the Irish banks, he predicted that FF and FG would both be wiped out and replaced by far-right (anti-EU and anti-traveller parties), he predicted that Ireland would see massive civil strife because of the crash.

        Now its 2017 and guess what: the economy is booming, the population is soaring, there is net immigration, bond yields are under 1%, FF and FG are way ahead in the polls, house prices are soaring (too fast) and, yes, there is a housing shortage and the government is running around like headless chickens trying to boost house-building.

        Does he have nothing to say on this? Why has he gone totally silent? Not a squeak, not a murmur. Is he still alive?

        1. He’s not gone totally silent. He’s , from his Ucd site, producing top class papers on economic history. Aka his job.

          1. @ Brian Lucey

            I like your blog but I feel in this case you are simply one academic defending another. If his “job” was economic history why did he declaim so loudly on what were then current economic issues? I think MK is simply the “poster boy” for when economists get it spectacularly wrong. And it would now be “intellectually honest” of him to admit that he was completely wrong. I – a mere pleb – was very pessimistic during 2009-2012 and posted as such on this site (albeit under another moniker pre being banned under said moniker) but there comes a time to admit to admit that I was completely wrong and people like JTO and “Bond. Eoin Bond” were right but were totally voices in the wilderness and were savaged on this very site/blog.

            And I really do like your blog! Although I do think you’re a bit too uncritical of the public sector but perhaps that’s just my blind spot given I am a public sector worker and am a critical insider.

          2. He may well be the greatest economic historian the world has ever seen. I would never criticise him for that. But, I thought historians dealt with the past, not the future. So, what made him think he was qualified to make such apocalyptic forecasts and why did the media give him such credence?

            The reality is that a lot of economists’ forecasts in Ireland are not based on sound technical analysis, but on their far-left political outlooks. They hoped that the economy would crash as they believed that would sweep away the last remnants of traditional Ireland and usher in a new progressive liberal left-dominated era. Their now-discredited forecasts simply reflected that.

            There needs to be recognition that the wildly over-pessimistic predictions for long-term economic and population growth by Irish economists in the period 2008-2011 is a major factor in the current housing shortage. Its pathetic to see the same economists who were whining for a decade that Ireland was building too many houses, indeed that the Celtic Tiger was based entirely on house-building, now saying that Ireland can’t build houses.

      3. Oops, I posted this in the wrong place first time.

        I didn’t whine for a decade about the number of houses being built. He did.

        He repeatedly attacked FF for building too many houses, he claimed they weren’t needed, he claimed they were only built because of corruption, he predicted that Ireland wouldn’t need to build any more houses for decades, he predicted that Ireland would need to knock down more houses than it built in the next decade, he predicted that that house prices would fall by 80%, he predicted that the economy faced total ruin, he predicted that Ireland was facing famine-levell emigration and depopulation, he predicted that government debt would hit 360bn euros, he predicted that Ireland would go bust, he predicted that the ECB would take over the Irish banks, he predicted that FF and FG would both be wiped out and replaced by far-right (anti-EU and anti-traveller parties), he predicted that Ireland would see massive civil strife because of the crash.

        Now its 2017 and guess what: the economy is booming, the population is soaring, there is net immigration, bond yields are under 1%, FF and FG are way ahead in the polls, house prices are soaring (too fast) and, yes, there is a housing shortage and the government is running around like headless chickens trying to boost house-building.

        Does he have nothing to say on this? Why has he gone totally silent? Not a squeak, not a murmur. Is he still alive?
        Reply

        1. @ JTO The man himself!
          https://m.youtube.com/watch?v=11CCxv2ueiQ
          Ireland needs houses. It has lots of them but in the wrong places, courtesy FF’s obsession with tax incentives driving investement in the wrong places. A bank bust was the result and a near collapse of the economy. If I am not mistaken, the country’s level of indebtedness is four times what it was. It is the FF errors of the past that are constraining the capacity to resolve the current housing problems.
          As to predictions in this area, not a single country to my knowledge, however well run, has avoided housing busts of some kind. Morgan Kelly got the core analysis of what was happening right. Many watching that night did not understand the terms being used. We do now.

          1. @DOCM

            Welcome back.

            Thanks for the link. It was nice to see Brendan Keenan on it. I knew him at Queen’s in 1867 (or was it 1967?), anyway a long time ago.

            A Goodbody report a few weeks ago said that the number of empty houses in Ireland was much less (under half) than what had been thought, Unfortunately, I can’t find the link.

            Lots of people predicted a fall in house prices. Its the scale that counts. MK predicted house prices would fall by 80%, which caused panic and resulted in almost all potential purchasers holding back. Shouting ‘Fire’ in a crowded theatre syndrome. In the event they fell 50%. But, going from the subsequent rebound, that was a massive over-reaction caused by said panic. More reliable experts at the time (e.g. Economist magazine) said house prices were 20% overvalued, which has turned out to be about correct. If prices had fallen by 20%, rather than 50% or the predicted 80%, the problems for the banks would have been much less severe.

            There is also the point that the manic pessimism in 2008-10 about Ireland’s long-term economic future was directly responsible for bond-purchasers refusing to purchase Irish bonds, which is what triggered the IMF intervention. Ireland’s deficit was never any worse than Britain’s, which had no trouble in funding. The reason is that bond-purchasers were confident of a UK economic recovery, but believed Ireland wouldn’t recover. If it had been known at the time that Ireland’s economic growth would soon come roaring back. there would never have been any recourse to the IMF. Those few who ignored MK (and the others) and did buy Irish government bonds in 2008-10 made one of the best investments ever. To this day I kick myself for not being one of them. I talked the talk but din’t walk the walk.

  2. @ Ronan Lyons

    A pity I can’t go to this conference as I once did a term assignment on Sir William Petty when Prof. Bob Black and Antoin Murphy lectured in Economic History in TCD. Ah the memories!

    1. Elia, “sir” is not appropriate for this irish website. We are a republic. We do recognize bullish!t titles. Stop that nonsense.

      I agree with JtO, we are back in business and growing. He’s been right all along.

      Brexit will be a disaster for the UK but great for us.

  3. If those academic economists who secure some measure of a public profile had as much influence on the making and carrying out of public policy or on the behaviour of economic actors as is sometimes alleged, then the baiting might be justified. But they rarely do, and it isn’t. Most are happy to go with the flow, to observe the playing out of economic forces in hindsight, to secure lucrative research or consulting assignments or to sit on public boards, commissions, committees or review bodies.

    As Brad de Long has pointed out recently:
    https://www.project-syndicate.org/commentary/anti-globalization-socialism-of-fools-by-j–bradford-delong-2017-08?utm_source=Project+Syndicate+Newsletter&utm_campaign=a2ac4ed271-sunday_newsletter_13_8_2017&utm_medium=email&utm_term=0_73bad5b7d8-a2ac4ed271-93613385

    the current mutation of capitalism, in addition to all the features of globalisation, requires full employment and near-permanent boom. The peculiar Irish variant of this mutation in the early years of the century had a boom that got even boomier. But, like all booms, it proved to be unsustainable. Morgan Kelly, almost alone among his peers, called this out. And he probably should have left it at that.

    The bust and the resulting correction were severe. But some form of recovery was inevitable and the pressures to create another boom are building. However, the repaired Irish variant of the current mutation of capitalism is not able to extend the boom conditions as widely as it did in the early 2000s. Pervasive rent-seeking imposes an excessive burden. The extent of the previous level of popular support, or, at the least, of acquisence, does not exist. This Irish variant is not working for many voters, particularly younger voters. This could force some modifications and that’s why a FF-SF coalition is a realistic prospect.

  4. John, is that a briar I observe protruding from your backside?

    Economic forecasting is about being able to toss a two-sided coin and then to recognise the difference between one side of the coin from t’other. However, being able to analyse emerging economic data – and come up with a plausible explanation is another matter entirely. But a few careful folk did this, and did correctly predict the outcome. Their records survive. And their descriptions and explanations have little, if indeed anything at all, to do with their philosophical orientations. Its a demonstration of their personal curiosity, their experiences and their ability to direct their intellectual capacities onto a complex question. And being somewhat inconvenient.

    Perhaps you may be able to enlighten us about this difference: 50 private residences constructed during the ‘Boom’ on the outskirts of Killucan (look it up) versus the same number constructed in a suburb of Dublin or Cork. And I’m not alluding to the price differences here.

  5. JtO (and others): Morgan Kelly’s main contribution to the debate around the time leading up to the crash was a warning of the likelihood that the banks (and in particular, Anglo) were going to go bust. He was roundly abused for this and attempts were made to silence him, but he was spot on, when many others were silent or very complacent. Some other economists issued dire warnings, maybe expressed in a more diplomatic way.

    Maybe MK was a bit pessimistic about the prospects for a rapid recovery, but then this site was full of pessimists who were quick to rubbish everything said by optimists like JtO. Our present housing crisis is in large measure due to the faster than expected economic recovery and consequent recovery in housing demand.

    While it is easy to collapse the construction industry in a situation like that of 2009-10, reviving the sector is always a slower, more difficult job. As for building too many houses, a big part of the problem was that they were built in the wrong places: there is still a big hangover from excessive building in some areas, especially the north-west. There is still a financial hangover, which has many aspects, and which make normalisation of the housing market a very difficult proposition.

    1. If only MK had confined himself to Anglo Irish Bank then we wouldn’t be mentioning him at all on this site but he went much further than that including predicting the end of FF and FG (among his many totally non-economic-history declamations). His IT articles were widely disseminated and you can google them now just to see how far he did stray from the woes of Anglo Irish Bank. But, given this thread is loosely related to economic history (with a lecture called after Richard Cantillon at the DEW Conference) it would be interesting to see if there is any example in history of an economy suffering a crash and then rebounding so quickly. Is Ireland now unique in this respect or are there precedents for this? If no, what lessons can be learned from the Irish experience? If yes, did Ireland follow the same policies as other economies?

      Let’s not forget another economist who is day-by-day being undermined: Paul Krugman. What do you know – austerity does work! Portugal and Spain have now rebounded economically. Greece is an exception and I’ve no idea what’s going on there. The Krugmeister’s NYT articles have become even more strident as the intellectual rug has been pulled from under him. Another one who could eat a bit of humble pie.

  6. “… but then this site was full of pessimists who were quick to rubbish everything said by optimists like JtO.”

    Full? Pessimists? Rubbish? Really, John?

    I reckon the commentaries (about property related matters) on this site may have more to do with a temporal related context – that is, the prevailing financial and political circumstances, rather than a reliance on the historical knowns or future unknowns. Problem is (for some) the commentaries may be a tad inconvenient.

    I can postulate a future decline in residential property values – because ….., but if ……, then ……. You know how it goes. One-liners are useless in this matter. I may (or may not) be correct in my assertion but if I identify and describe the data I am using, and possibly my analytical procedure – then its open to others to point up any deficiencies or errors which would invalidate my conclusion.

    There is another – and quite neglected thread on this site “Speaking Truth to Power(lessness)”. Over the last 3 or 4 decades there has been a ‘Cartelization’ of economic power incorporating the elites of the main-stream political parties (the ones who participate in government), the elites of our civil administrations and trades union and the elites of our financial and business enterprises. These cartels are the powerful ones: they decide. The rest of us are just a bunch of tax paying, useful idiots. Mind you, we do get to vote, now and again. The historical alignment of Right v Left is gone. Now, its the Power Full v the Power Deficient. Guess who’s ahead?

  7. JtO

    http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.492.3685&rep=rep1&type=pdf
    This is the UrText of Morgan

    “Were this relationship to hold for Ireland, it would predict falls of real house prices of 40 to 60 per cent over a period of 8 to 9 years”

    So, not really 80% at least no then
    As to what happened? Lets recall that we didn’t really have proper house price indices. What we have now is ok. Not perfect.
    It suggests the following p-t falls , in nominal terms but as inflation has been muted…

    40-60% seems to be on the ball there.

    National – all residential properties 55%
    National – houses 54%
    National – apartments 64%
    National excluding Dublin – all residential properties 57%
    National excluding Dublin – houses 56%
    Dublin – all residential properties 60%
    Dublin – houses 59%
    Dublin – apartments 65%
    National excluding Dublin – apartments 67%

    “I didn’t whine for a decade about the number of houses being built.”
    AFAIK Morgan has not opined for a number of years, 5 or so, on houses. So that’s about 50% of your estimate.

    Elia
    “I like your blog but I feel in this case you are simply one academic defending another. If his “job” was economic history why did he declaim so loudly on what were then current economic issues?”
    Thanks
    If you follow my blog, as all should, you will have read many cuts at the academics. MK is the least likely academic in Ireland to need anyne defend him. This is me merely trying to set the historical record straight.
    Economic history in its modern incarnation is a heavily data driven science. I imagine he looked at the narrative, said hmm, got some data an messed about. That’s actually his job, to use economic tools to evaluate issues. He specialises in economic history. But hes not an ant.
    Its quite interesting – nobody has talked about the large number of lecturers and academics in economics, public policy, and related who DIDNT say boo. Theres a thesis in that.

    “ Although I do think you’re a bit too uncritical of the public sector but perhaps that’s just my blind spot given I am a public sector worker and am a critical insider.”
    There’s enough uncritical unthinking slapping down of it. The vast majority of the problems come from poor management enabled over decades by poor organization which is a political choice.

      1. I have long believed in going to the source where possible, not to rely on newspapers.
        So lets see.
        That report is from this presentation
        http://www.irisheconomy.ie/Crisis/KellyCrisis.pdf
        “Internationally unprecedented falls of 80% or more are therefore a real possibility” thats not a prediction. Its an outcome of a model. Its moreover in a presentation which looks at a bunch of things and comes after a set of “if this and if that” .
        he also in that talk said it would take 10y to get back
        2007 Per capital vol Household and NPISH peaked at 18.7k 2007 and was 18.1k in 2016 so yep, pretty good there.

        Etc etc.
        Did he get everything right? Hell no. Did he sound the alarm and cause a lot of scales to fall from eyes? yep. But, and here is the thing that has yanked my chain all the way. Its the easiest thing in the world to sit on the sidelines and anonymously comment. Its far harder to do so under ones own name. But thats the right way to do it in this context.

        So John, appeal to the organisers – ask that you be given a slot at Kelly’s to show the one true way of John. Stand up and be counted. Or, not.

  8. I see the attacks on Morgan Kelly are continuing apace, and getting nastier, but it is good to see reasoned commentators replying.

    No decades-long statistical sweep with wipe the Ireland bust off the history books, and no decades-long statistical sweep will obscure the damage done to hundreds of thousands of lives during Ireland’s crash landing; a landing that was forecast by politicians, public officials, bank ‘executives’, and virtually all experts bar a few to be the softest of soft landings.

    Ireland did go bust, very bust. If Carsberg did a bust, they would would not be able to do it like Ireland did it.

    And the ECB did take over the Irish banks, in cahoots with the Irish state, who would not force bondholders and depositors to take the losses. And the ECB still wields the power. Ask PTSB, as they scramble for survival. And ask the central bank how often the ECB tells them to sell the Anglo bonds.

    The Irish state put €63 billion of bank debt onto its citizens, plus a few more billions under the table in AIB tax credits, that nobody in academia or government seems willing to admit to. It does not suit the narrative.
    If the EU had not changed the head of the ECB, Kelly would have been right; because without Draghi and QE (€2.3 billion to date and counting), and consequent rock bottom interest rates, the euro would be toast, and several EU countries would now be bust. The fact that the QE money goes into the right pockets helps ease concerns of the monetary jihadis and money men.

    And what has given rise to Ireland’s growth in the past few years?
    Has that stellar growth landed in the pockets of employees throughout the country? No it has not. Extra jobs at low pay, no pensions, no tenure.
    Has that growth enabled the working population to buy their own homes? No, it has not. We have seen a huge shift toward tenancy in that past number of years. Is that a measure of success.
    And of Ireland can be proud of its low corporate tax rate, 12.5% and lower depending on the amount of shenanigans you are prepared to engage in. Ireland with it low corporate tax rate contributing to the great bleeding wound of inequality, that is getting worse throughout western society.
    And can we even measure growth anymore? Whose Ireland benefits from the growth, gdp-Ireland or gni*-Ireland?

    Brushing the Irish bust under the carpet is an attempt to rewrite history that is unlikely to confuse historians, and certainly will not afford an excuse for the lack of housing in this country in 2017.

    It must be nearly four years since Ronan Lyons (on RTE) stood on the bridge, at Broombridge, and proposed solutions to the housing crisis. But virtually nothing has been done in the interim, and no houses have been built.
    [FG and FF can take the blame for that. They don’t really intend to build houses. They are part of the landlord and property game, and doing very well out of it, as are many of the policy makers.]

    No polity-long statistical sweep will disguise the fact that, the current generation of politicians have, in what is now a wealthy country, the worst homeless crisis in the history of the state. It is a shameful legacy.

    1. Homelessness is a choice… one made by the political system.
      There are no shortages of probably workable solutions. There is a chronic shortage of political will at all levels.

    2. @Joseph Ryan

      Your post shows why all the leftwing parties (excluding SF) between them total about 5% in the polls.

      You say FF and FG won’t build houses because they are in the pay of landlords.

      But your hero, Morgan Kelly, said they built far too many houses because they were in the pay of builders.

      Both can’t be true.

      The facts are clear:

      (1) Despite phenomenal population growth pre-recession, Ireland built enough houses to house that growing population, peaking at 85k in 2007. For that the government of the day was roundly criticised by the same people who are now complaining about a housing shortage.

      (2) New-house building then collapsed to about 8,000 a year during the recession.

      (3) It is now rising sharply again, close to 20k in 2017, but not fast enough to keep up with population growth, which is accelerating fast and may total 60k this year (about 35k natural increase and 25k net immigration).

      Corruption doesn’t come into it. The main problem is the total failure of politicians, economists et al to predict the extent of the resurgence in population growth, a failure that is due in no small measure to the manic pessimism that persisted doing the recession.

      1. JtO, is there to be no respite from your Bullsh*t, and daft and innacurate comments. You exclaim that two sets of facts cannot be true. They sure can if’n they are not simultaneous in time. Contexts can, and do, change. Politicians are known to be devoid of a spinal chord. Instead, they have evolved permanently, perfectably flexible principles. Your facts are ‘clear’? Well, so what? Good on yeh!

        Please endeavour to persevere to get your mindset around the inconvenient fact that Right v Left political contention is history – like the Dinosaurs. Its been replaced by Power Politics, where the few have much power, the many have little. Since this political contention is a relatively recent emergence its difficult for many commentators to realise that such a reformation has actually occurred – let alone to try to understand what this new political configuration will portend for democratic societies.
        In the meantime, please try to empathize with the Irish Labour Party and other lefty squaddies. They have yet to arrive at the station, where they will discover that their train has been annulled and there are no refunds on their tickets. They’ll tresh about for a while, then wander off in a sulk. So, what will replace them? God knows. None of our current parliamentary parties has yet successfully straddled the wandering Median Voter. Maybe Leo will succeed 😉

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