14 November 2010

Irish Tea

Marginal Revolution | Tyler Cowen | Profile of Morgan Kelly

He is the Irish economist and sage who predicted the decline in property prices and also predicts future political chaos in Ireland. The profile, unnecessarily snarky at points, is here. [...]

Here is Kelly on TV. His current prediction?:
Now he is forecasting mass mortgage defaults and an ugly popular uprising. The first stirrings are already visible, he says, with "anxiety giving way to the first upwellings of an inchoate rage and despair that will transform Irish politics along the lines of the Tea Party in America", giving rise to a new "hard-right, anti-Europe, anti-traveller party".
I suppose it's yet to be seen, but has the Tea Party movement really been that transformative in America? For all the talk of how revolutionary (figuratively and literally) they are, all I've seen is that the incumbency rate in congress dropped to 84%. That's low compared to recent history, but it's still pretty gradual change.

I now very little about Irish government, but AFAIK they are a parliamentary republic, so maybe a similar movement would have more impact there than here. Nevertheless I think Europeans systematically overestimate how transformative the Tea Party is in America.

None of this is to say Ireland isn't headed for serious instability.  My (mostly uninformed) opinion is that it is. I just think Kelly's choice of comparison is weak.

I'm interested to see if their real estate mess turns into a battle between defaulters and performing borrowers, as I get the impression it will in Ireland.  That's bubbling under the surface in a lot of places, the US being one of them, and we've only seen proxies of that conflict thus far.  That's a more interesting duel than another left-vs-right match-up, or hard-right-vs-centrist, or one of the other pairings we've already seen.

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