Monday, March 18, 2013

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...

Friday, March 15, 2013

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!

Saturday, March 9, 2013

Grow Your Own Growth

Four years after I wrote about the need to Grow Your Own Bank, finally an Irish crowd funding operation has been launched. It's called Linked Finance and it brings to Ireland a much needed micro-lending service for SMEs and entrepreneurs.

Or should I say brings the service back to Ireland? Apparently Jonathan Swift invented micro-lending in the 1700s as a way of supporting low income, rural Irish families. Plus ca change...

I've been a supporter of Kiva these past few years, and Linked Finance looks like going the next step and turning it into a domestic lending operation. I wish them every success.

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