The Other Hand

Are we in the foothills of another Euro area crisis?

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Sarah Carey joins us to discuss an election campaign that has finally caught fire. But not in the way that Fine Gael would like

When will they realise the civil war is over?

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Well-known political analyst, commentator and occasional comedian, Tull McAdoo, joins Chris to talk about the General Election.

Will Ireland join the rest of the world and sweep out the incumbent government? Or is the economy doing so well that incumbency is actually a positive?

We may have to wait until Easter for a government

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The world is changing. Rapidly. Have we noticed?

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Irish employment is still growing - at another all-time high. Not unrelatedly, house prices are also booming.

UK farmers are protesting about inheritance taxation. What are the issues and do they have wider resonance?

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Budget 2025 has been derailed by Project 2025 - the radical agenda denied by Trump during his campaign (it really is so extreme even he had to disavow it). Notwithstanding the denials, Project 2025 is now being implemented. But few Irish or European politicians seem to have noticed.

Latest EU Commission economic forecasts are pretty dire.

The US is leaving the EU for dust. And a new gap has emerged: the EU North versus the Eu South

Will the EU ever be an economically dynamic region again?

Has the battle against inflation really been won? At least one natural gas price has doubled recently.

China is limbering up to fight the Trump trade war.

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Trump is impossible to forecast - so should we stop trying? Is talking about him merely enabling him? Colluding with him?

There is a spiders-web of connections between Trump and Brexit.

Farage, Le Pen and Orban have a new spring in their step.

Brexiteers still hanker after a free trade deal with the US. They must confront the reality of a protectionist US President - and government.

One way Trump could make mischief would be to implement his global tariffs but offer the UK an exemption. The British government could hardly say no. But that would blow out of the water all of their efforts 'to get closer to the EU'. That would be the end of the 'rebuilding trust' project.

Brexit is now too difficult to talk about. It may even be a problem too difficult to solve. Most Britons agree that Brexit was a mistake but is now a problem child best kept hidden.

Electorates everywhere want anything but the truth.

A fabulous conversation with Professor Chris Grey

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The list of reasons why Trump won is getting longer. Some make sense, some do not. We look at the evidence-based ones. One very stark conclusion: not every Trump voter thinks all that positively about the President-elect. It's simply that they find the Democratic Party even more repulsive.

The Trump trade is on. The stock market loves the prospect of trade wars, budget-busting tax cuts and mass deportations. Something doesn't add up.

Incumbent governments everywhere are having a very hard time. The outgoing Irsh coalition should take note.

Old media is as wounded as the opinion poll industry. Podcasting helped win it for Trump. A billion spent on TV ads did nothing for Harris.

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Well, we said it was the year of election. Now we live with the consequences.

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The fabulous US economy

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The first UK budget ever delivered by a female Chancellor was presented with aplomb and panache. A pity the details didn’t match up to the presentation.

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Germany is in economic trouble. Its car industry - 7% of the economy - is being squeezed by struggling exports (to China in particular) and a poorly handled transition to EVs.

Add in problems that go back decades and maybe its time to become a Eurosceptic again.

If Trump wins, the Democrats need to look in mirror.

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Loads of men (mostly) say their favourite movie is The Godfather. Plenty also rate the Sopranos as the best TV series ever. Is that because they secretly (and not so secretly these days) would love to have a Mafiosi's unchecked power?

Brexit is the most contemporary example of people saying the system doesn't work for them and then replacing it with something far worse. The US appears to be on the verge of making the same mistake.

Unchecked power accompanied by extreme wealth turns people mad.

The checks and balances built into the US constitution were put there by people who recognised the dark side of human nature. They designed a system with guardrails explicitly put there to protect against someone like Trump rising to power.

Trump unchained will be nothing like the Trump of his first reign. There is nobody left, even on the Supreme Court, to hold him back.

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It's easy to conclude that we are a violent species. Just look at the state of the world.

In a quite brilliant book, Professor Christopher Blattman argues that history books can give a misleading impression: on most days, war doesn't happen.

Blattman has read everything. He has talked to the street gangs of Chicago and drug lords in Colombia. He summarises his vast knowledge with five main reasons why going to war - rathe than making peace - seems to happen. Armed (pardon the pun) with this knowledge, policy makers can get better at peace making.

But, he warns, most policies are wrong, or likley to be. Grand, big theories of everything are best avoided. He urges a 'marginal' approach, perhaps best described as 'suck it and see'. Take baby steps and prepare to fail. But keep going. Small steps may mean you won't make big mistakes.

It's hard to end wars but they always do. It's the terms that matter. It looks like Putin is going to win in Ukraine.

Even more seriously, are China and America stuck in the same trap that drove ancient Sparta and Athens to war? That's the famous Thucydides Trap.

A truly fabulous discussion. Our thanks to Shane.

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Irish house prices are now well in excess of their pre-financial crisis peaks.

Is the only thing that will get them down an old fashioned recession? More supply is certainly needed but it is far from clear that more houses equals lower prices - other things are not equal

Why do we still bang on about a cost of living crisis when inflation has fallen towards zero? If not actually zero. May be the answer is really simple: in the US (and probably elsewhere) food and energy price inflation reached 40% in 2022 - higher even than during the great energy shock of 1973.

Europe has more problems than lower interest rates can solve

Even if people have more letters after their name than are in their name, they are still capable of saying daft things.

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The arguments over the help needed for the domestic economy run and run

Is Sinn Fein just a reunification party with a few half-hearted populist policies thrown in to get elected?

Neither Chris nor Jim won the economics Nobel Prize.

And much more!

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Is the Irish inflation rate too low? All economists bar one or two say that the economy is over-heating. Could the opposite be true? Latest data certainly hints in that direction.

Inflation disappoints, ever so slightly, in the US, where interest rate expectations have shifted again. The European interest rate outlook hasn't shifted at all - rates are coming down. Very soon.

An important debate is to be had about whether or not pubs, restaurants and hotels need special treatment from the government.

China would love some over-heating.

Do we want to drive cars that are potentially controlled from Beijing? Or is that just science fiction?

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Is Keir Starmer up to the task? The early evidence suggests not?

Are bankers worth it?

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Has the coalition blown it? Or does the outpouring of budget criticism from official Ireland miss the point: it's what the people wanted?

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Will the electorate be grateful for budget 2025?

Where was the long-term strategy and/or vision?

So little for Irish businesses, particularly indigenous SMEs

Tax base narrowed again

Infrastructure mentioned loads of times with few details, let alone plans

Not nearly enough focus on return on invetsment

Will it work? In political terms at least.

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As we approach Budget 2025, we reflect on the usual leaked measures and suggest we are just children looking for the keys to the sweet shop. And yet so many of us say we want more houses, better health and high-quality schools. And then we elect politicians with a mandate to do none of those things.

Is democracy structurally incapable of delivering much needed change? Or is just a system that delivers blocking coalitions to parliaments everywhere that prevent anything serious from happening? Is democracy now just the culturally and economically complacent ensuring that things stay pretty much the same?

All this as the European economy sinks back into sullen economic mediocrity. At least interest rates will fall again in a few weeks and give house prices another much needed boost.

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A prominent ex central banker has suggested that Ireland should spend the money: it's time, he says, for 'Jam today'. That's our interpretation, at least, of his only slightly coded remarks.

Trumponomics: it's time to take them seriously, if not literally.

Another Chinese economic stimulus: bazooka or pea-shooter?

Your weekly reminder about the global nature of the housing crisis

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There is a building slowdown in global manufacturing that is starting to look serious. This is a Chinese problem that is fast becoming a major issue for Germany. That's one explanation for the rise of the right in Germany.

The new UK government is beginning to look like a bewildered bunch of not very good middle managers

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The US central bank goes large and delivers a big interest rate cut. Thereby admitting it should have cut sooner.

The Irish property market moves into double figure price inflation. And mortgage rates are only going to fall further

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What is the right level of interest rates? While discussion of 'R-star' might seem esoteric, they do say one important thing: Euro interest rates are way too high.

The Federal Reserve has achieved its price stability mandate and is now switching to focus on employment.

Growth is now front and centre of all European economic policy debate. Even - especially - in the UK. The new chancellor is going down exactly the wrong path if she sticks to her fiscal rules. Don't just listen to us - every economist in the world is now on the same page when it comes to investment and growth. The time has come to junk the old rules and embrace sensible risk taking.

The response to the Apple tax case has at times verged on hysteria. It would be funny if it wasn't so serious. Where are all the foreign multinationals going to go?

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Irish inflation this week confirmed that the economy is showing few, if any, obvious signs of overheating. Prices are still going. up but at their slowest pace in a long while. That said, prices are 20% higher than we saw pre-pandemic.

Memo to economists: don't pretend you know what causes inflation.

European interest rates are still too high.

When does government debt matter? 100% of GDP? 300% of GDP? As always, it all depends! But the US is adding to its debt in a most reckless and unsustainable manner.

The Draghi report is worth reading at least twice. It is incredibly hard hitting. Europe's economy is falling far behind the US. His message to Euope's policymakers: do whatever it takes to catch up. Otherwise, the European project risks failure.

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In this podcast special Jim talks with Alex Denning, a 25 year old racing superstar.

The business of modern racing is all about money, contacts and driving talent - in that order.

Alex talks about doing exactly what his parents didn't want him to do. Making it with McLaren!

But it costs anything between 5-15 million to break into Formula 1. Sometimes more - your dad has to buy the car company!

Want. to lose weight? Forget about Ozempic - drive a McLaren very fast for lots of laps and you will be a lot slimmer.

Alex gives us a young person's perspective on life in Ireland. And on things UK, French and Italian (the French are rude and unwelcoming. Italian driving habits are very strange)

EVs are losing traction. Why?

And much more. Enjoy!

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To the surprise of many observers, Europe's top court has told Apple it must pay Ireland €13.1 billion in back taxes.

In a case that dates back to 2016, it's partly a history lesson about dodgy practices - the double Irish and all that. Those days are long gone.

But there is also an investment lesson here, one that is not just of historical interest. The outcome of the original investment was €14.8 billion became €13.1 billion, thanks to the original purchase of negative yielding government bonds. If the disputed taxes had been parked in Apple shares, the Irish government would today be in receipt of around €100 billion. Investment decisions are always massively consequential. Where to invest the €13.1 billion now?

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Latest jobs numbers from the US point to a weakening economy. Interest rate cuts are on the way. The only question is, 'how big?'

European elites are warning that Europe could cease to exist in its current from unless radical remedial action is taken. Few politicians will lsiten. If they do, they won't act.

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Still drowning in cash, the new Finance Minister is warned by IFAC, yet again, not to spend it.

Are the fiscal giveaways of past budgets really costing each household €1000 a year?

Amidst all the cries of 'they are windfall taxes' it's forgotten that capital investment is - or should be - very different to current spending. We used to argue about borrowing for investment purposes - economists have always pointed that that borrowing for investment is perfectly ok, provided the return on that investment is higher than the cost.

Now, some seem to be arguing that spending money that we already have, windfall or otherwise, still shouldn't be spent, even on high return projects. There's crying wolf and then just being daft.

GDP data is all over the place and has defeated us. Exchequer returns and other data point to an economy still growing although not one that is overheating. Tax revenues are booming and unemployment is down again.

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Rather than put all the spare cash in a 'future proof' fund, should the Finance Minister simply recognise the future is here, right now?

Deviance has been normalised.

Bicycle sheds with golden roofs: a parable about quality versus quantity of government spending

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J D Vance has shot to prominence following his selection by Donald Trump to be, potentially, the next Vice President of the US.

In this podcast special, we focus on Vance's 2016 best-selling memoir, Hillbilly Elegy, to try and explain and understand the man who clearly wants, one day, to be the leader of the free world.

We are joined by Professor Shane O'Mara of Trinity College Dublin to discuss all things JDV. And there really is a lot to discuss! Shane is also a best-selling author (of much better books than JDV's memoir) and writes his own Substack called BrainPizza. Do check out any of his works, especially his most recent book, 'Talking Heads: The New Science of How Conversation Shapes Our Worlds'.

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The upcoming budget is thought likely to include changes - increases - to tax breaks on pensions and a rise in inheritance tax thresholds. We both agree that helping millionaire pensioners with even more tax breaks is nuts. But we disagree sharply about the wisdom of inheritance taxes. These are incredibly emotive topics. As our discussion shows!

The Other Hand always welcomes feedback - good, bad or indifferent. We share a particularly interesting perspective from one listener.

Ireland's population continues to soar. But people are moving in and out.

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Ireland has just set a new record for the number of people in employment. Back in the day, you either worked on the farm, civil service, domestic service or emigrated (only slightly simplified). If you had accurately forecast the relentless fall in agriculture-related jobs over the past decades you would have also forecast an overall economic disaster - one that did not happen. There were plenty of bad times of course but you would not have expected rapidly growing population and job numbers in 2024.

Artificial Intelligence also threatens a jobs apocalypse. But maybe there are lessons to be learned from Ireland's economic transformation.

Kamala Harris has promised a 28% tax rate. Do we take her literally or seriously? If delivered it could BOOST Ireland's corporation tax revenues. There again, Trump wants to reduce it to 15%, a clear threat to those revenues. And, of course, neither might happen.

Everyone is paying too much attention to policy proposals and not enough to the vibe.

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Irish house prices are approaching double digit rates of increase. What is going on? Is it supply? Demand? Interest rates? Demography? The robust economy?

Of course, it's all of the above. We need to think about all of these things. If you really want house prices to fall you would massively increase supply and aggressively raise interest rates. A good old fashioned recession would really help. So be careful what you wish for.

The economy is, thankfully far from recession. But something weird is happening to sectoral trade trends with the UK.

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Chris explains why he has deleted his Twitter/X account.

Donald Trump is weird, but is it a good attack line for the Democrats?

Elon Musk's resemblance to Bond villain Elliot Carver

Russia has been invaded: a story that doesn't figure on the front pages.

And the latest economic news.

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It seems a touch fanciful to us, but some analysts are wondering if Intel could go the way of Nokia. What is true is that at least one big company with a big Irish presence is in a spot of bother. Let's hope its recovery plan works.

But it is a reminder that many a once great company has disappeared. Who remembers that Nokia once was as dominant as Apple?

The US regulator has declared Google to be a 'monopoly'. That could have profound consequences.

Whether or not technological obsolescence and/or the regulator is coming for big parts of the tech sector, one thing is certain: if they can't turn the lights on, they will go elsewhere. Power supply is becoming an urgent issue.

All this in more in our weekend edition. Enjoy!

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Reminder: stock markets go down as well as up. But wait long enough and they usually go up. Is the return of volatility a sign of a problem or just another wobble that will soon be forgotten?

One problem is the story we create around these type of events. Our narratives are often not very good guesses.

Chris puts some cash to work and Jim sticks to Bitcoin - this is not investment advice!!!

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Markets message to central banks: you are making a big mistake

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'Weird' and 'vibe' are the words of the moment.

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What is with all these extreme Catholics in positions of power & influence in the US?

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Is J D Vance nomination Trump's big strategic error?

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Reflections on Hillbilly Hypocrisy.

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Has Simon Harris managed to change the narrative? He's 'taken back control' of at least some of the key issue. We shouldn't underestimate the powerful psychological impact of wiping out Sinn Fein's aura pf 'electoral inevitability'.

Is ' buying the next election' with a giveaway budget really a sensible strategy? Even politically?

Is it true to FG's self-image as the party of fiscal rectitude? Is it even possible - is the Irish electorate that biddable?

Perhaps call the general election and ask the electorate: vote for us and then we will show you the money.

Alternatively, maybe a budget for housing, health and infrastructure would be more politically astute than one that doles out cash via tax cuts.

SF's tack to the centre - or even the anti-immigration right - includes schmoozing business. That could alienate its left-wing.

What are we going to do when all the priests are dead?

What is right wing? J D Vance on conservatives Vs libertarians.

And Much, much more! Enjoy!

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Is Keir Starmer already getting lucky? Only one month's data, but GDP growth smashed estimates in May.

US and Irish inflation down again.

IFAC warns about an 'overheating' risk to the Irish economy. Why we should all, in fact, get to love overheating.

Nvidia, AI & the US stock market: amazing growth

Biden is losing his friends. He should make Kamala Harris President now.

Orban has a very dodgy group of friends. Poland is getting nervous.

Reform. We note that the infighting looks to have begun

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The Irish political scene looks as fluid as that in France, the UK and elsewhere. The polls are getting it wrong and plenty of voters don't make up their minds until they enter the polling booth. We take a deep dive into all of this with renowned Irish political analyst and commentator, Tull McAdoo.

Why is Sinn Fein's vote collapsing? Will they recover? Maybe their last General Election result was a proper Black Swan event and the recent local and European elections are a better reflection of their base level support. Maybe they simply are not the well-oiled machine of urban - and mainstream media - legend

Has Simon Harris helped you put out the washing? 'Politics is a retail business'.

Coalitions always end badly, the current one will be no different. Smaller parties, in particular, always emerge very damaged.

Advice to all wannabe politicians: knock on doors!

And much more! Enjoy.

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In conversation with author, blogger and columnist, Professor Chris Grey

Post the Labour landslide election victory, some of us have smiles on our faces. Does the result mean we can now really turn the page on the chaos and mendacity of the last 14 years?

Is Keir Starmer relying on dumb luck for success? Is this the last chance saloon for the UK?

"Stability, Investment and Reform". How deliverable are these things? Will they be enough, particularly as there is no money?

Labour is placing a big bet on getting construction going again. Who is going to do he building if immigration is to be reduced?

How do you do he right thing if you are subsequently politically crucified?

Can the UK really move closer to the EU with Farage in Parliament and the rabid Brexit media waiting in the wings?

And much more! Enjoy!

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The Irish finance minister is drowning in cash. Booming tax revenues the clearest indicator - much better than GDP - that the economy remains robust.

Politics over economics: Charlie McCreevy once said when finance minister, "If I have it, I'll spend it'. It's not what the budgetary watchdog or the central bank would endorse - quite the opposite of course. But if its bad economics, is it good politics? If so, the upcoming budget is going to be something else.

Will that budget be quickly followed by an election?

The UK, of course, has just had its own election. We discuss the many and varied takeaways. Chris suggests that the UK electing a centrist government after 14 chaotic and crazy years is cause for celebration and could just change the economic narrative, whatever the political fallout. Maybe Liz Truss did us all a favour and has given a salutary lesson to those who would flirt with batshit crazy populism. Maybe even in Ireland.

Joe Biden and the Democrats have to change the narrative. Make Kamala Harris president.

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In this podcast we welcome back regular guest, Professor Shane O'Mara, neuroscientist and professor at Trinity College Dublin.

I a review of an important new book by Dan Davies, professor Brad de Long of Berkley asks the question: given we are over 15 times better off than our pre-industrial ancestors, why are we so miserable. Davies gives one answer: things have become so complex, few people know how anything works any more and nobody is in charge. So nobody is accountable. 'Nothing works any more' is a constant refrain and Davies gives us his ideas about why so many of us feel that way. His answers may also give pointers as to why the established order - which seems to to make us so unhappy - was overthrown by Brexit, Trump and is going that way in many other countries, not least France.

Professor O'Mara pushes back, gently, against some of this. Demagogues know how to trigger the 30ish % of us that have latent authoritarian tendencies. Make us afraid of immigrants, the deep state, Brussels - we all know the mantras by now. Le Pen & co just know how to get a significant minority afraid and angry. Maybe it was ever thus. Chris argues that something has, in fact, changed and some things are worse.

Shane says there is plenty of evidence that says we are happier than the headlines suggest. But measuring 'life satisfaction' is nuanced and tricky.

But isn't it obvious where the increase in unhappiness has occurred? France, the US the UK?

The UK was the first to give manifest expression to its anger with the rupture - disaster - that was Brexit. Maybe because of a form of collective PTSD, Brexit cannot be talked about because of the fear of triggering precisely that post-traumatic stress. Maybe its just too soon to have the adult conversation. But those who brought forth the trauma are about to get their just deserts. Maybe. Populists appeal but cannot deliver - or just govern.

Some more thoughts on Biden and cognitive decline - don't jump to hasty conclusions.

And much more! Enjoy! We certainly did!

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The French elections will likely reverberate across Europe. Perhaps even alter the course of the war in Ukraine.

The UK will now see the final death throes of the Tory Party. Farage is on the cusp of another victory. Of sorts.

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The most inept election campaign in history?

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Is The Other Hand behind the demise of Sinn Fein?

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An immediate post-budget Irish election?

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How far can EU rate cuts diverge from the US? And much more!

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Jean-Claude Juncker, ex-head of the EU Commission, once famously said that policymakers know what is the right thing to do, but don't know how to get re-elected if they do it. That is true too much of the time. But is there a unique opportunity for the Irish government, for once to do the right thing and to be rewarded for it at the ballot box?

Finance Minister McGrath has promised a tax-cutting budget. Is he missing a trick? Housing has such political salience in Ireland, if he threw the kitchen sink at building more homes instead of tax cuts, maybe that is also a vote-winning strategy? And also an opportunity to give Sinn Fein a good kicking while they are down?

Meanwhile, data emerges that shows the Irish tax system becoming even more unbalanced. That's storing up problems for the future.

San Francisco hasn't had an earthquake lately but its commercial property sector is crashing. Vacancy rates are probably higher that the 30+% reported as some big companies are effectively squatting in very under-utilised space. Why not just covert all this space into housing? Lots of other cities, including Irish ones, are in the same position.

Rishi Sunak's damage limitation exercises backfire. Labour can't believe its luck.

Keir Starmer's irish influencers.

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UK election dominates headlines that should be about China simulating war

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Inflation falls in the UK but *only* to 2.3%. Cue weeping and wailing and much hot air. The narcissism of small differences.

Does anybody know what really causes inflation? Does the ECB understand the connection (or lack of) between interest rates and inflation?

The human aspects of all this are often lost in dry discussions of monetary policy and inflation. But the human dimension is real, big and too often ignored by central banks.

Nvidia, AI, data centres and the nuttiness of stock markets.

Housing policy contains asymmetrical risks: building too few is much more dangerous than building too many.

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Opinion polls on both sides of the Atlantic tell fascinating stories. Sinn Fein has lost momentum. Have they peaked too soon? Rishi Sunak's Tories are now polling at lower levels that the nadir of Liz Truss' government. That really is some going. Trump breaks wind audibly in court, hears stories about his sexual peccadillos and goes up in the polls.

It is said that SF are suffering because 'they have let their electorate down because of immigration'. Right wing parties everywhere, including Ireland, are on the rise because of the immigration issue. Yet right wing governments in power in the UK and Italy show how hard - impossible even - 'solving' immigration is.

Is it really true that immigrants take jobs? Spoiler alert: no.

What are SF's actual policies? Are they like the UK's Labour party, a policy-free zone? Long on promises, short on what they will do?

We are almost certainly still filling our cars with Russian fuel.

China and Russia deepen ties. China enables the Russian war machine. China has the best batteries.

Global stock markets continue to tell us: 'don't worry, be happy!

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We might need 80,000 new houses a year - or we might not. It all depends on so many imponderables.

One of them being the level of immigration. We now see that everywhere as a problem to be solved. Is it solvable?

Biden is trying to keep cheap Chinese electronic vehicles out of the US. Europe is thinking about doing the same. That's all to protect domestic car manufacturers who don't know how to produce cheap EVs. The Chinese do. We are repeating the mistakes of the 1970s when Japanese car manufacturers figured out how to make cars that consumers want. Western car companies, by and large, didn't know why production techniques that dated from the 1930s were no longer fit for purpose.

Solution: copy Chinese IP! They've been doing it to us for years. Return the favour!

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The State the UK is in & much more!

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In conversation with Professor of Experimental Brain Research, Shane O'Mara.

Robert Kennedy Junior says a worm has eaten part of his brain. Is this possible? Yes - but his 'brain fog' and other symptoms could have been caused by something else. Partly eaten or not, his possible brain injuries are not likely to have led to a predisposition to conspiracy theories. RFK is a prominent anti-vaxxer, for instance.

Why do so many of us fall for conspiracy theories? Belonging, group hugs and tribalism are part of the answer. We take cognitive short cuts that help us ignore objective reality.

Anti-vaxxers have, in some cases, just forgotten what disease looks like. Shane reminds us of the actual cheer that went around the world when the polio vaccine was first announced.

Lots of protests are around at the moment. Protest is a uniquely human behaviour - why bother when so few protests actually elicit change? Generally, they don't work. It's that group hug thing again. The "collective effervescence" of being part of a crowd.

All this and more in another conversation with the brain expert!

Shane O'Mara | Professor of Experimental Brain Research | School of Psychology and Institute of Neuroscience | Trinity College, Dublin - the University of Dublin,D02 PN40, Ireland

His new book: Talking Heads: The New Science of How Conversation Shapes Our Worlds 

His newsletter: BrainPizza

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The economic consequences of the war in Gaza have so far been very limited. The oil price has been well-behaved, all things considered.

But that war is shaping up to be a forever war. That's the logical conclusion that flows from observing two sides committed to the other's destruction.

If the war costs Biden the election then another logical conclusion is that the great Bidenomics experiment is over. There is a lot of doubt about the fiscal sustainability of Biden's economic program but not enough recognition is given to its phenomenal success.

We discuss the incredibly hard hitting article by Martin Wolf that lays out how the US is heading for despotism and how we are, indeed, all heading for disaster if Trump is elected. It's scary stuff.

Everything is connected to everything else. Macron really is right.

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Unemployment edges up on both sides of the Atlantic - things are definitely showing early signs of slowing down.

Whatever the outlook there are very good reasons to quietly ditch the 2% inflation targets that apply to the FED, BoE and ECB - particularly in the US, too much harm will be caused by a drive to 2%. Quietly adopt 3% inflation targets and get on with interest rate cuts. That 2% number was plucked out of thin air in the first place, decades ago, and has outlasted its usefulness.

Rishi Sunak came to office promising much and delivering next to nothing. His political skills are next to non-existent. A strange thing to say about a Prime Minister. But he staked his premiership - and electoral chances - on a target that not enough people care about and a target that he couldn't meet. A more skilled politician would have asked 'what do most voters actually want?'. He asked the bat-shit crazy wing of the Tory Party that question and, surprise surprise, got a bat-shit crazy answer.

Emmanuel Macron is right: unless Europe rearms, Putin will wage war on us. He already is - it will just get nastier and closer.

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The border never went away you know.

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A packed podcast:

It may be the ultimate social faux pas, but dare we say the latest Revenue annual report contains a wealth of fascinating data?

Back taxes owed by SMEs could be - maybe are - a real problem

Short-termism: anyone wondering why some companies and countries don't inest enough in themselves need look no further than META's (Facebook) results this week. The shares tanked because the tech giant announced a huge capital spending program (mostly in AI). Financial markets want one thing only: instant gratification. That translates as "show us the cash". Dividends, share buybacks and increases in revenues are the golden trifecta that leads to higher share prices. But investment means spending cash. That's the big no-no. The paradox, of course, is that the only thing that leads to long-term growth in dividends, share buybacks and revenues is investment. Companies and countries that stint on investment don't grow. You couldn't make it up.

If (hopefully a big if) another European war is on the way, is being a member of the EU and remaining neutral mutually inconsistent?

And all the latest data!

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The Irish government has released its latest assessment of where the economy is heading. It looks like. a forlorn attempt to dampen expectations ahead of another giveaway budget in a few months time. The last before the general election.

The golden goose will someday stop laying its eggs. What will future generations think of us, what we did the largesses generously donated by the multinational tax boom? Will we be 'grateful Norwegians', now rich because they saved their windfall taxes (from oil). Or will we resemble the 'morose British' who blew all their windfall oil taxes on what?

Is there much more capacity for extra housebuilding than is conventionally thought?

Will house prices ever fall to 'affordable' levels, even with extra supply. Or were houses just 'the wrong price' a generation ago?

Chris takes the other side of the IMF forecast bets: we are approaching peak short term growth optimism and the IMF is way too pessimistic about the medium term

At least Ireland has a fiscal debate grounded in arithmetic. The UK's fiscal conversation is total hokum.

And all the latest economic data

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Wing nuts are in charge?

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Latest opinion polls - and a bit of political crystal ball gazing - points to no one party getting more than 30% of the vote at the upcoming Irish general election.

Why is that and what might it mean? Will Ireland 'Go Dutch' (or Belgian...)? Are we in for weeks or even months of prolonged coalition negotiations?

The deteriorating geopolitical situation might give voters pause for thought about the sort of politicians they want. As talk of WW3 gets louder, will Ireland want to be led by SF?

What is for sure is that SF policies will be subject to forensic scrutiny - unlike last time.

Ban Tik Tok? Chinese Communist Party or Elon Musk - who is the better owner of social media companies?

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Initial financial market reaction to big events is often wrong

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More thoughts on the. Economics of Irish reunification

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Professor Edgar Morgenroth has recently published a joint paper with professor John Fitzgerald that takes a deep dive into the potential costs of Irish reunification.

We talk to Edgar about his work. We look at lessons from german reunification and the asumptions behind his estimates that it could cost the Irish taxpayer a lot of money. And a lot of sweat and tears.

Planning will be essential. Bad outcomes after ill thought out referendums have historical precedent. Brexit for instance.

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Watch the oil price

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Irish and Eurozone inflation falls again - what is the ECB waiting for?

In the US, the super soaraway economy is dashing hopes of quick rate cuts . Perhaps any rate cuts. We need to remind ourselves that this is a good thing.

Will the earthquake in Taiwan create another supply shock? We think not but it is worth watching. So are oil prices worth close monitoring.

Preparing for war on islands just off Taiwan.

Is the EV craze cresting?

Why do some US Republicans believe anything that Putin says?

We look at the history of civilian casualties during wartime.

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One of the first thing that economists are taught is the Free Trade is a Good Thing. One thing that economists don't speak too much about is that free trade creates both winners and losers. Arguably, not nearly enough attention has been paid to the losers.

Whether or free trade is always a net positive depends on many factors. And the alternatives to free trade - the choices made by politicians about things like protectionism - can be even worse.

That said, China's accession to the World Trade Organisation was a huge shock and wiped out huge swathes of manufacturing industry and jobs throughout the developed world. Too much too soon seems have been the case. Those left behind communities became the hunting ground for Trump, Brexiteers and populists. They stil are - and there is a distinct possibility of a second China shock coming our way. What will be the results this time?

Irish SMEs complain about government inspired costs and regulatory burdens. Are they right to moan? A lot of SMEs are either failing or in danger of going bust.

Interest rates: the new normal isn't too far away from where they are now. Discuss.

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Leading journalist Sarah Carey talks to Jim and Chris about Leo Varadkar's departure and Simon Harris' accession.

'Harris needs to be much more than a good communicator'. The big test, one of many, will be his choice of cabinet. That will signal whether genuine change is on the way. 'The reshuffle will tell us if Harris is serious'

Will any exiting FG TDs be tempted back?

Why are so many voices of the centre so scared to speak up?

Why do 'progressives' oppose building anything?

Harris should ban his party from social media.

Mainstream media ( we are looking at you Fintan and Una) is as responsible as Sinn Fein for painting Ireland as a failed state. All of the evidence, with full acknowledgement of all of the problems, shows emphatically that Ireland is the opposite of a dystopian hell hole.

Sinn Fein have peaked. The electorate is waking up to the fact that they offer slogan without solutions.

The ones to watch are the independents. Maybe some of them should be tempted into government via ministerial appointments - but only if they join the Party.

Politicians take all of the blame and none of the credit. It's a cruel and thankless gig. Maybe FG need a spell in opposition?

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Global growth showing signs of acceleration

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Markets are telling us to stop worrying

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A packed podcast!

For the past year or so we have been noticing weakness in Irish exports, particularly pharmaceuticals and one or two other key areas. Falling exports were a big driver of the Irish 'recession' last year.

At least part of this was Covid related and the fall represented payback for the massive boost arising from exports of vaccine and other health related products during the pandemic.

It's only one month's data, so shouldn't be over-interpreted, but latest numbers hint at two things. First, normalisation of exports may be close. Second, as the quintessential small open economy, Ireland is a bell-weather for the world economy. Maybe there is a hint of global trade and global growth picking up.

Maybe the U.S. won’t cut rates at all this year?

Irish inflation continues its fall.

Oil prices edging up again.

China - the one economy where we cannot talk about a positive growth surprise.

interest rates at current levels are maybe the new normal?

Macron’e Ukrainian epiphany

Jim disappears down the crypto rabbit hole

Happy St Patrick’s day! Ireland’s soft power is worth billions. Only idiots begrudge its exercise.

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Everybody in financial markets is starting to ask: is this another bubble, a near quarter century after the dot.com crash? Are those comparisons with 1999/2000 valid or is the AI boom for real? What does AI think of the AI 'bubble'?

The UK ends its mild recession but lots of workers are going on the sick - the long term sick. This could be a real problem for growth prospects.

The Central Bank of Ireland forecasts a robust irish economy and muses about workers shifting from building offices to constructing houses. If so, that's good news.

The people of `Ireland have given two fingers to the political establishment. Patronise the electorate at your peril. Could Sinn Fein be the big loser from the referendum debacle?

Another European lurch to the right, this time in Portugal.

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All the latest economic data

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All the latest economic news.

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On the numbers, the Irish economy is in recession - but is it?

Talking to one segment of the Irish diaspora - what do they think of their host country? And their thoughts on Ireland.

European inflation comes in at 2.6% vs 2.5% expected. How awful.

"The incumbent government is deeply unpopular with younger voters because NIMBY older voters are allowed to block all development" Which country is described in this quote?

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Current opinion polls are pointing towards another coalition government. How long would those coalition negotiations take? Would a prolonged period of no government be a bad thing for business and the economy?

Are banks making too much money? If so, what is the right remedy? Tax those profits? Break them up to force competition? Encourage Fintech new entrants?

Irish jobs at a record high. A truly remarkable story.

2nd anniversary of the Ukraine war. Many are in denial but Russia is on the advance and Cold War 2 is well underway.

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House prices rise in Ireland - - for the fourth month is a row? How come? Plenty of buyers is the simple answer. It seems that higher interest rates don't work in the way they used to. Do they even work at all?

Speaking of interest rates, the prominent economist who got the US - and global - inflation story right, and therefore the interest rate story right, is musing about the possibility that the next move in US rates might have to be up. That's right, up. If true - and it's only an outside chance at this stage - this will have ramifications for all financial markets and economies. Maybe even house prices. There again, maybe not.

Executive pay - winner takes all in a system that is so obviously rigged it could turn anyone into a lefty revolutionary.

Westminster doesn't work. It is a Trifecta of dysfunction - we talked about this before the latest nonsense erupted!

Russian forces are on the advance in Ukraine. It doesn't look good.

Jim is asked how it feels to be replaced by a robot!

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A lawyer - a 'special prosecutor' - recently caused a furore with an allegation about Joe Biden's 'cognitive decline'

In conversation with Professor of neuroscience Shane O'Mara we explore the mysteries of ageing and the emerging evidence about how to maximise our chances of becoming a 'Super Ager'

That lawyer shouldn't have tried to diagnose Biden. Nor should any non-specialist. There are strict criteria for that sort of thing. There is no publicly available evidence that suggests Biden meets those criteria. A speculation: these days, all things considered, if that evidence existed it would have been made public - leaked in one form or another.

Nothing is guaranteed at the individual level - non-smokers do sometimes get lung cancer, Chris's grandmother died in her sleep at 98, previously quite well, after smoking and drinking all her life. That, of course, proves nothing. We have to understand risk and probability: adopt a certain lifestyle (and/or be lucky enough to have one), and chances of living well and living well into a ripe old age, can be raised significantly. What is known:

While we have heard about some or all of these things before, the evidence is piling up that they really do matter. There have been roughly 120 dementia drug trial failures in recent years, with recent successes only showing very limited efficacy. But some scientists say as many 40% of dementia cases can be prevented by lifestyle changes. Go for a walk and chat with your friends! It can make a huge difference!

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The other day we received the longest email ever sent to The Other Hand.

It was a thoughtful point-by-point critique of pretty much everything we have said about Trump, Biden and the state of American politics.

We get lots of emails and comments and Tweets etc. We try to reply respectfully to as many as we can. Indeed, we encourage the conversation.

In replying to this email we attempt something different: the salient points are given voice by an AI robot. A pretty simple and cheap one, admittedly, but it is an experiment, let us know what you think.

So, a first for The Other Hand: in conversation with a robot.

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What is public service broadcasting for? Why does RTE exist? Should it?

Whatever the answers to these questions, a new model for public serve broadcasting is sorely needed.

Populist suggestions for an amnesty for licence fee dodgers are unserious politics. But that's the dilemma facing Sinn Fein: become a party of teh centre or spout more populist nonsense? As they lose votes to the anti-immigrant right, they are caught between a rock and a hard place.

Why is the hard left, especially in the UK so prone to anti-semitic conspiracy theories. Because Lenin left them with exactly that legacy. They can't seem to shake it off.

The US is also fond of conspiracy theories. There is often a puppet-master behind events like Pearl Harbour, 9/11 and the Moon Landings.

The conspiracy garbage around the Hamas attacks on October 7th have a lot of historical precedent. One conclusion theorising is that conspiracy is both seductive and addictive.

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Inflation comes in higher than expected in the U.S. Markets push interest rate cuts further into the future.

Inflation comes in lower than expected in the U.K. Markets think the Bank of England has a green light to cut soon.

This might come as a surprise: nobody is quite sure what causes inflation. Central bank models assume the link between interest rates and inflation is via the labour market - wages. But inflation has come down, as interest rates have gone up, without any connection with the labour market - economies are running with very tight jobs markets. Go figure. Somebody needs to work out what the inflation process is, since central banks appear to be looking in the wrong place.

Why is the inflation target 2%? Any science behind this number?

The magic and mystery that is productivity growth. It’s not been around for very long. Everybody wants some but nobody is quite sure how to deliver it.

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Ever heard of DEXIT?

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John Bruton RIP

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'Dr Strangelove' was a 1960s movie that satirised the cold war. It explored 'Mutually Assured Destruction' and was a riff, in a way, on 'game theory'. A number of characters have emerged that echo Strangelove.

The US economy continues to power ahead, not least in terms of almost unbelievable job creation.

Higher interest rates were supposed to cool the economy, destroy jobs and therefore lower inflation. In theory anyway.

Job growth continues to astound yet inflation is, essentially, back to target. If interest rates are responsible for that fall in inflation, a big if in our view, they haven't worked via the channel of the labour market (or the housing market or most any other market). So how have higher interest rates achieved anything? Would - did - inflation come down all on its own? After a supply shock, yes! The US may yet run into demand problems now - too much of it thanks to very strong labour demand but that hasn't been a problem until now, at least.

And Jim has a few words about farms and farmers.

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Sleepwalking to war? Not so much!

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The super soaraway US economy and stock market

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It's coming up the 75th anniversary of the publication of George Orwell's 1984.

We discuss with professor Shane O'Mara the various psychological insights of Orwell and how they endure and resonate to the present day.

We don't like chaos and detest change. When our beliefs don't cost us anything - and keep us on good terms with fellow group members - we don't care about the facts. Winston Smith's torturer didn't just persuade him to say two plus two equals five, he got Smith to truly believe it.

Beliefs, once acquired are sticky and change only slowly. We look to our group identities for affirmation, not for facts or data or truth.

So how can minds be changed, or at least put on nodding acquaintance with objective reality? Start by realising that facts don't matter, at least in the first instance. And listen very carefully, with respect, to what people have to say.

Are we sleepwalking into authoritarianism? Do autocracies naturally burn out? Do democracies?

Do old men have a tendency to authoritarianism?

Trump voters say they want the US to become less chaotic with less government intrusion in their lives. So why are they voting for someone who will (has) deliver exactly what they don't want?

Dislike of the other is becoming more important than fondness for our own tribes. Are Democrats really "un-American"?

And a brief update on Shane's thoughts on new wonder drugs that cut obesity and control appetite.

He is still sceptical about AI.

ChatGPT on what it thought about the show notes, above:

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'The Bitter lessons of Brexit'. We all fervently wish that Brexit has gone away. It hasn't. It's more like a slow moving chronic disease but it is sill an infection for the economy and the UK at large. It's going to stay that way.

Was Darwin wrong? Could evolution go into reverse? Evidence of Homo Sapiens losing their backbone are everywhere, especially in Washington DC. De Santis demonises Trump and then endorses him. The Don has a new best friend.

Yeats comes to mind:

Turning and turning in the widening gyre   

The falcon cannot hear the falconer;

Things fall apart; the centre cannot hold;

Mere anarchy is loosed upon the world,

The blood-dimmed tide is loosed, and everywhere   

The ceremony of innocence is drowned;

The best lack all conviction, while the worst   

Are full of passionate intensity.

Surely some revelation is at hand;

Surely the Second Coming is at hand.  

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Trump is ahead in he polls and could be the next leader of the free world. He has promised to be a 'dictator for a day'

Will it be the catastrophe that most seem to expect? Is everything he says wrong?

Are liberals the ones who have created the conditions for the global march of right-wing populism?

Immigration is the big controversy everywhere. Nobody is debating it rationally. We give it a try.

Ireland says no. To Wind farms, solar farms, tall buildings, any buildings, data centres and immigrants.

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Latest trade data for Ireland suggest exports are struggling - for the first prolonged period in quite a while. That points to a world trade slowdown - and generalised economic weakness everywhere (apart from the US). Irish GDP could well shrink in 2024 if this continues - for the second year in a row.

Inflation surprising to the upside is now a more-or-less global phenomenon after much bigger than expected falls through 2023. Is the last mile on inflation reduction going to be really hard?

A lot depends on energy prices. Notwithstanding the trouble in the Red Sea, oil prices are easing back again. As are natural gas prices. If that continues then all will be well with inflation and interest rates will fall this year, albeit maybe a bit later than mortgage holders would like. If oil prices spike, all bets are off.

Trump's coalition of supporters is expanding to include the educated (graduates) young. That's new, Why do so many Americans think that life is getting worse when the facts speak otherwise. Why are narratives at such variance with reality? Facts and data just ain't what they used to be.

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Low or no economic growth is a bigger problem than most people realise.

What we don't know about growth might surprise you.

Too many country's are losing interest in growth. Not Ireland - yet. But unless growth is nurtured it will be quick to disappear. And there are plenty of warning signs on the horizon.

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China wants Taiwan on the same terms that it took Hong Kong. 'One country two systems'. A bargain that Xi Jingping failed to honour. No wonder most Taiwanese are suspicious.

Taiwan's upcoming Presidential election merits close attention. There probably isn't a 'good' outcome. Just ones that hasten or defer a potential confrontation.

Latest inflation data, for end 2023, has generally disappointed. We still think inflation will continue to fall and central banks risk cutting rates too slowly.

Ireland is drowning in cash - booming tax revenues - but lacks strategic fiscal direction. It's raining, so why salt money into a rainy day fund. Health, infrastructure, law & order and the environment are all crying out for resources. Instead, populist giveaways are the order of the day, whether from the government or opposition parties.

The biggest fiscal threat facing Ireland is the unsustainability of booming corporate tax revenues. One way to deal with this is to boost the domestic side of the economy, especially SMEs. Ireland needs an IDA-type organisation to replicate the success of the real IDA with domestic firms.

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