On the Exponential Growth of the Irish Economist

Ah, the Irish Economist.  In the current climate, ask the average man on the street to name a full team of national soccer players that might tog out against Georgia next week and he would struggle.   Sure there is Keane, Duffer, Shay Given, and that guy with three grannies who won’t play, Stephen Ireland.   But the rest of the squad is not very visible, and wouldn’t slip off the tongue of Joe public.   However, ask him to name his economist dream team, and he would have no shortage of names to throw on the team sheet – Jim Power, David McWilliams, George Lee, Morgan Kelly, Alan Ahearn, Austin Hughes, Dan McLauglin.  These guys and their brethren get an enormous amount of face-time and print-line in our media, both back during the boom and now even more during the recession.   Do other countries have such an array of high profiles economists?  I doubt it.  Americans would generally know whether Greenspan or Bernanke are in charge of the federal reserve, but that would be as far as it goes.  Likewise in the UK.  But over here, these guys are borderline celebrities.  And they come in so many different flavours.


In retreat - Austin "Comical Ali" Hughes and "Desperate" Dan McLaughlin

There are the bank chief economists, the paid shills for mortgage banks who constantly predicted during the property bubble would never end and interest rates would never go up.  Austin Hughes at IIB and Dan McLaughlin of Bank of Ireland were the too most shameless mouthpieces here, constantly predicting interest rates would drop while in the real world they clicked up every month.  Finally, with the the house crash barbarians at the gate, they talked of a “Soft landing”, then a “Soft-Hard landing”, and finally gave up and retreated back into bank headquarters.    There hasn’t been a peep heard out of either in months.  A closely related species was the estate agent chief economist.  Again not sighted for some time, they may also be in hiding but more likely extinct.

Then there are the academic economics. These are a more recent media phenomenon, slowly coaxed out of the wood work as the clouds began to darken, with all sorts of doomy predictions that were not really predictions at all since the crash was apparent.  Morgan Kelly and Alan Ahearne seem to be the two main players in this grouping.  In fairness to Mr Kelly, he made a very strong if somewhat late call on the direction of the banks and the housing market, while his academic economic brethren kept their eyes closed.  A particularly rare species is the trade union economist.  I know it sounds like an oxymoron, but they do exist, and occasionally someone like Paul Sweeney from SIPTU will turn up on the radio waves to argue the economic benefits of communism.


Who is number one? - David "McDreamy" McWilliams or Jim "Max" Power

 And of course, who could ignore the freelance economist like David McWilliams.  Tied to neither boom nor bust, this guy has been a constant presence , coining the phrase Celtic Tiger, and predicting a house-price crash for over 15 years.  However, I think it would be cruel to say a stopped clock is right twice a day.  Despite the ginger Hugh Grant look ,and an awful habit for gimmicky stereotypes like the increasing extinct “Breakfast roll man” and the Asbourne inhabiting “Decklander”, I actually have quite a lot of time for him.  He stuck to his guns while others threw muck at him and called him a crackpot for ten years.  He even proposed the idea of a bank guarantee in the Sunday papers just before the government brought it in.  And while a scary thought, it wouldn’t be a stretch to imagine one of the Brians got the idea by idly reading the Sunday Business Post over breakfast.  In recent months, I think even McWilliams might have been overtaken as number one all round media economist by Jim Power.  He seems to be on Questions and Answers, Primetime, Newstalk, and writing newspaper editorials all day, every day.   Representing pension product operator  Friends First as their chief economist,  I can only surmise the company’s current sales strategy for flogging PRSAs is to put him on the airwaves 24/7 to whinge about public sector pensions and pile on uncertainty over the future of the masses.

Economist is a title that has been muddied and devalued over the years, particularly in this country.  It seems like any old hack with a business degree can now use the title.  And while the shameless exploits of the bank mouthpieces have done much damage to the profession’s reputation, the main reason I have little time for them anymore is that they are just not very good at their job.   As a social science, economics is always going to be a bit fuzzy, lacking some of the harder laws and certainities of the physical sciences.  But as current climate shows, none of them really have a clue what is going on.  They never agree and their predictions seem to change on a daily basis.   I would would have more faith the Eamonn Dunphy’s prediction on whether Ireland will qualify for the world cup finals than when Jim Power predicts we will climb out of recession. 

The reality is the global economy is a vast, interconnected, non-linear system, and any prediction you hear on the radio from any economist, a shill or a genuine academic, should be first dipped in a tub of margurita salt.  We simply do not understand the system we have created.  And while economists never have a concensus on whether we are going to shrink or grow, because their simplistic models make accurate predicitons impossible, they are unified in believing that economic growth is a good thing that should be pursued at all costs.   Indeed, all economic theory revolves around the idea of growth.  In my opinion, that is the biggest problem.  And modern economic and monetary policy doesn’t just require linear growth, it needs to be exponential.  Unfortunately we live on a finite planet with finite resources.  Until the  economic theory moves to a model where things don’t go haywire when economies stop growing, it is doomed to failure.  And not just the failure of repeating cycle of recessions but the complete destruction of the planet.

However, I  am not asking the world’s economic theory be upended immediately.  The planet should survive my lifetime.  But what I do want is an exponential decline in the amount of Irish economists fighting for room in our media.  I’m over you guys.  Yes, we are in a recession.  Yes, you didn’t really see it coming.  Yes, I know, you have no idea when it will end.  But get off the TV, the matches are starting.  Did Andy Reid make the squad?