NWL RIP

 It's alway sad when a blogger you follow regularly hangs up the keyboard. It's especially sad when it's one of the very few blogs that has provided a unique and insightful commentary on what's really going on in our benighted country. Hence the sad news that Nama Wine Lake has published its final blogpost today.

The contents of the site will remain online, and will undoubtedly provided a valuable resource to future historians trying to explain how things went so horribly wrong in Ireland. Here's hoping, of course, that they'll talk of such things in the past tense.

NWL RIP.

A Second Reformation

I was speaking last week at The State of Europe Forum in Dublin. My job was to respond to a number of contributions from Christian economists from an Irish perspective.

As I was listening to talks by Tomas Sedlacek and Michael Schluter it struck me that the time might be right for a second Reformation in Europe. After all, the first Reformation (dated to Martin Luther's famous nailing of his 95 theses to the door of Wittenburg church) was brought on by a European-wide economic crisis. Too much money was being transferred from the hard-working Germans in the north to the feckless Italians in the south. Sounds familiar (though admittedly we can see what was paid for by all those papal indulgences; pity the same can't be said for the bailouts funded by the Troika).

As the 500th anniversary of Luther's famous protest approaches in October 2017, perhaps a Second Reformation will arrive in time to change the course of European history, just like the first one. With our politicians, intellectuals and business leaders now bereft of any ambition other than simply surviving, the next Martin Luther will undoubtedly be one who challenges the prevailing orthodoxy - and hypocrisy - like the first, and who calls on Europeans to aspire to a nobler spirit. One that is practically Christian, even if it isn't practicing Christian. One not so much guided by the invisible hand as by the visible heart. And who knows, he might even be a Catholic.

Funnily enough, Luther's theses are perfect for twitter. Perhaps it will be the 95 tweets that starts the Second Reformation...?

Relinquishing the Future

Strange times when I find myself agreeing with a Marxist:

Finance is to our stagnant societies what the space race and the Cold War were to the Eastern Bloc countries of the 1970s and 80s – a huge cost that the state imposes on its public, with the result that cities and economies start to become tedious processions of the same. Will Davies

ht Marginal Revolution.

The Phoney War

... is nearly over, according to Tullet Prebon:

The uneasy economic calm that has prevailed since the 2008 banking crisis is analogous to the “phoney war” of 1939-40. Like that military event, this economic one will end with a bang. 

Behind governments’ routine assurances to the contrary, the reality is that the world is ex-growth, governments and economies are indebted far beyond sustainable levels, the banking system remains extraordinarily vulnerable to the next shock, and strong rallies in global bond markets are bubbles waiting for a pin. 

Fundamentally, the problem is that the monetary economy has grown far beyond a scale sustainable by the underlying ‘real’ economy of energy and broader resources. The energy returns equation critical to growth in the real economy is weakening relentlessly, meaning that output is not capable of meeting the future claims embodied in the monetary system. 

No-one in authority has any real idea about how to bridge the gap between the two in any way short of value-destruction on a systemic scale. Moreover, Western governments have entered into welfare spending commitments which cannot conceivably be met in the absence of robust growth. 

In the absence of solutions, governments are prioritising the defence of the status quo in general, and of their own interests in particular. We are witnessing the early but unmistakable stages of an expropriation process designed to transfer private wealth to the state. 

It's all alarmist nonsense, of course, sure no Irish government would ever agree to confiscate people's savings...

After Progress

Government will do less for you. Companies will do less for you. Unions can do less for you. There will be fewer limits, but also fewer guarantees. Your specific contribution will define your specific benefits much more. Just showing up will not cut it.                          Thomas Friedman

The quote is from Friedman's op ed in today's Irish Times.  He thinks the solution to the developed world's worsening jobs crisis is better education to ensure a match between skills and jobs. But in the age of the Amazon Mechanical Turk that simply won't be enough.

The crisis is twofold: first we have The Great Decoupling whereby GDP appears to be getting bigger, 'thanks' in the main part to financial bubbles; but employment itself stagnates - due to innovation and automation rendering the skills of even the best qualified increasingly redundant.  The second part of the crisis is youth unemployment: never in history has the developed world (and Ireland, for that matter) had more, better qualified graduates entering the workforce and yet the number of young people out of work globally is almost equal to the population of the United States. And rising.

Here in Ireland the ratio of the adult population in work (i.e.: numbers in jobs divided by the total adult population) is back to (or below) levels last seen in the 1990s:

Meanwhile, Ireland's GDP is growing again - suggesting we have our own 'decoupling' under way.

Will a eurozone recovery reverse the trend? It might (though how you get the eurozone to recover is another issue). But I suspect we are witnessing a more profound change in our fortunes, one in which The Religion of Progress goes the way of most religions in the West - though probably with a lot more fuss. If the 'four horsemen' of progress (financialization, energy shortages, demographic winter and men opting out) don't turn back then it's hard to see how things will get better, never mind stop getting worse.

Still, I am a hopeful pessimist (to borrow Iain McGilchrist's self-description), and I think here in Ireland we will be forced to try a number of different things (from virtual currencies to 21st century monasteries) rather than wait for Brussels or Frankfurt to put their house in order. Whether an ageing cohort of political leaders have the vision, never mind the desire to really tackle the unprecedented challenges faced by our young people remains to be seen.

That's the hopeful part.

Sailing from Byzantium

I took this photo on the ferry crossing the Dardanelles in Turkey from Canakkale on the Asian side to the European side earlier this month. The sign simply means 'mosque', and leads to a room on the ferry for those who wish to answer the call to prayer in privacy on any of five occasions during the day.

The photo symbolizes a lot about Islam in Turkey. On the one hand it is a very devout Muslim country (the call to prayer in cities and towns reverberates around you thanks to the use of loudspeakers on the minarets of mosques - it makes the Angelus seem very tame indeed). It also, obviously, symbolizes the segregation between men and women in mosques, and in Muslim societies in general.

But the image also says something else: the mosque after all is on a very modern car ferry crossing one of the busiest waterways in the world. Turkey is the proverbial land of contrasts: it's European but also Asian; it's developed but also developing; it's secular but also Muslim.

It was my first time in a predominantly Muslim country, though Turkey is a bit of an outlier in several regards. The thing that struck me most is that religious practice is pre-dominantly a male preserve in Turkey. During our visit to the Blue Mosque in Istanbul our guide explained that women used to pray in the galleries above the ground floor, but as there are fewer of them these days they now pray in a separate corner of the mosque on the ground floor as well. The contrast with a typical Christian church in Ireland - of any denomination - could not be more extreme: here, congregations are predominantly elderly women and some men, and younger women with children.

The genius of Islam, for want of a better word, was to make men the custodians of daily religious practice, with women's involvement somewhat more optional. Christianity seems to be powering in precisely the opposite direction.

Of course, Islam is not a monolithic faith any more than Christianity. As a fascinating new study from Pew Research points out, there are huge differences between Muslims around the world when it comes to the percentage who think Sharia should be the official law in their country (all o f12% in Turkey by the way, versus 99% in Afghanistan). Nevertheless, there is pressure in most Muslim countries to make official law reflect more of the core Muslim beliefs (hence the price of alcohol in Turkey thanks to taxes imposed at the behest of devout Muslims, to levels well above Dublin prices in fact).

Indeed, Christians in predominantly Muslim countries are feeling increasingly vulnerable (Christians have become the most persecuted religion in the world according to none other than Angela Merkel). One result, perhaps, of the profound differences between Christianity and Islam that makes conflict as likely as cooperation.

Here in Ireland there were over 49,000 Muslims in the 2011 Census, up from under 4,000 in 1991. There are now twice as many Muslims as Presbyterians in Ireland, with their numbers growing by over 50% since 2006. Though Orthodox Christian numbers grew by more than twice that rate.

To the extent that Islam continues to gather and channel the support of men - and Christianity the support of women - then I can't help but be more confident (in the probabilistic sense) of a successful future for Islam. Though it may not be so great for women.

Trickle Down Optimism

I'm just back from Turkey (more anon), but in the meantime my company's latest Economic Recovery Index points to a thaw in consumer sentiment in Ireland. Maybe it's a case of 'trickle down optimism' as the 'good news' re Promissory Notes etc contributes to a more positive outlook on the part of consumers and businesses.

Or maybe it's because spring is in the air (then again, maybe not).

Amárach Economic Recovery Index March 2013 from Amárach Research

Also interesting to note that the mood among Dubliners is pulling away somewhat from the rest of the country.

Quote of the Day

From Ben Davies, reflecting on the Cyprus fiasco:

Mattresses now hold a 10% premium.

The Canary is Dead

The income tax was introduced as a temporary, emergency measure during America's Civil War. It isn't over yet, apparently. Now we are being assured that the theft of Cypriot savings announced on Friday is a one off, never-to-be-repeated measure. Yeah right.

The raid on Irish pension funds last year, followed by the raid on Cypriot savings accounts this weekend, tells us that there is poison in the European air and it isn't just the canaries who are in trouble.

As Charles Wyplosz calls it over at VoxEU:

All the ingredients of a self-fulfilling crisis are now in place: 

It will be individually rational to withdraw deposits from local banks to avoid the remote probability of a confiscatory tax. 

As depositors learn what others do and proceed to withdraw funds, a bank run will occur. 

The banking system will collapse, requiring a Cyprus-style programme that will tax whatever is left in deposits, thus justifying the withdrawals. 

This would probably be the end of the euro.

Let's hope nobody strikes a match...

Rap the Rising

I've been too busy with work to blog much recently. But I have been able to fit in some time to, em, co-produce a rap video!

A big thanks to all the 5th year history students at Ballymun Comprehensive, to their teachers Paddy and Edel, and to the crew from DCU for all their technical assistance - Kim, Jamie and Anni:



All in aid of promoting the debate next week in Ballymun on whether Ireland needs a new Proclamation for 2016.

Maybe it'll inspire a few more young ones to Rap the Rising over the next three years - they're the 2016 generation after all!