Paul Krugman has an interesting piece here, and I can’t resist posting a link to something similar I wrote back in 2010.
PK’s piece also gives me an excuse to post a link to this piece by Oxford Economic & Social History graduate Christopher Kissane on incentivising emigrants to come home, which makes several good points IMO.
Great work by Robert Kelly and Fergal McCann, pdf here, abstract below:
The resolution of the long-term mortgage arrears (those in arrears greater than one year; LTMA) crisis represents one of the key policy challenges in Ireland today. In this Letter we highlight the range of economic and demographic characteristics associated with the experience of LTMA in Ireland. Our analysis suggests that unemployment shocks, changes in mortgage affordability, the accumulation of non-mortgage debt, higher originating loan-to-value ratios and weak housing equity positions all have an important explanatory role. We also outline repayment patterns among households at differing levels of mortgage arrears. It is shown that in 2014, over three quarters of those in LTMA had continued increases in their arrears balances. This contrasts with those in the early stages of arrears, where less than half of all borrowers had arrears increases.
Oireachtas Joint Committee on Jobs, Enterprise and Innovation
– Report on Low Pay, Decent Work, and a Living Wage
Think Tank for Action on Social Change
– The Distribution of Wealth in Ireland
OECD Economics Department Working Paper
– Taxes, income and economic mobility in Ireland
Why is anyone shocked at the political news from France this morning? Everyone is saying that the FN got a boost from the November 13 atrocities, and perhaps they did, but there are far longer run forces at play here.
One is the corruption and sleaze that characterises Parisian politics. But there are also economic factors that are having a predictable impact on attitudes (and if they are predictable, then economists don’t have the right to ignore them). Globalisation creates losers as well as winners, for example, and if no-one really cares about the losers, and we just pay lip service to the problem, then it is predictable that there will be a backlash. The Euro has not only locked in a set of distorted real exchange rates, but a macroeconomic policy mix with a pronounced deflationary bias. If times remain tough enough for long enough, and politicians hear your pain but don’t actually do anything about it, some people will eventually respond by voting for candidates who reject existing constraints on policy making. “Europe” is increasingly experienced as a set of constraints preventing governments from doing what their people want them to do, rather than as a means of empowering governments to collectively solve problems.
So why would anyone be surprised that Mme Le Pen has done so well; and is it not likely at this stage (though 2017 is a long way away) that absent major policy shifts she will come first in the first round of the Presidential election? And let there be no mistake: if she actually won the second round, either then or in 2022, this would mean the end of the EU as we currently know it.
What is so frustrating about all this is that it has been so predictable. Here are some links dating back to 2010, a year that risks being viewed by future historians as a fateful one:
And me, with apologies for the self-indulgence, writing for Eurointelligence.
I am pretty sure Martin Wolf was saying similar things back then, and that many others were too.
The good news is that, as recent Irish experience shows, the populist vote stops rising when the economy recovers. (The decline in the independent vote share is quite striking, and SF have clearly stopped rising. And no, I’m not saying that anyone is like the French National Front, but support for these parties is the closest Irish equivalent to the French anti-establishment protest vote that is benefiting the FN so much.) And 2017, and even more so 2022, are a long way away. But Eurozone monetary and fiscal policy, and social policy too I would think, need to start taking into account the fact that the entire European project, the good bits as well as the harmful bits, is now facing an existential threat.
Update: Paul Krugman weighs in here.