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Periscope by Niall O'Dowd

Irish economy will be an issue in US 2012 presidential election ---Economic miracle or still a basket case?

Posted on Saturday, October 01, 2011 at 07:09 AM

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The Irish economy looks set to become an issue in the American presidential election in 2012 with competing visions of how austerity is working in the Irish economy.

The right-leaning Wall Street Journal has carried a series of articles pointing to Ireland’s improved economic figures and pointing out that austerity is working there.

However liberal economists such as The New York Times columnist Paul Krugman disagree with that analysis saying reports of an Irish recovery are way overblown,

The latest Wall Street Journal article was the influential ‘Heard on the Street’ column by Richard Barley on Friday which stated boldly;

“Austerity works—or at least, it is working in Ireland. The country's bonds now yield less than when Dublin received a €85 billion ($115.57 billion) bailout in November 2010, despite the escalation in the euro-zone debt crisis since the summer. That offers a flicker of hope. If the economy continues to perform, fears of a Greek-style debt restructuring will continue to recede, ultimately allowing Ireland to start issuing bonds again.”...

The article concludes that “a return to markets as early as 2012, which may be possible, would send a powerful signal—about Ireland and the euro zone.”

Paul Krugman strongly disagrees, Writing in his blog the Nobel Economics laureate states that “There’s a visible push to claim that recent Irish experience — somewhat better-than-expected growth in the second quarter, rising exports — vindicates austerity policies. “

He continues “So, some cold water.... Ireland is “doing a little better than expected It’s achieving a significant amount of “internal devaluation” via deflation, which is leading investors to mark up the possibility that it might actually avoid default...
…. eventual recovery after years of Depression-level unemployment is a strange definition of success... “ Krugman says.

It seems only a matter of time given the Wall Street Journal preoccupation with Ireland these days and its' key role as a feeding agent for Republican talking points that some Republicans on the stump or in the debates point to Ireland as an example of what their austerity directed policies can bring about.

That is sure to cause a rejoinder on the other side and then let the debate begun with Ireland as Exhibit A.

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tullyallen | Oct 02, 2011, 05:58 AM EDT

MacGuinness for president

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mamaginnty | Oct 01, 2011, 06:02 PM EDT

Did the Americans really believe that second in command creep Gilmore. The coalition..Kenny F.G and Gilmore LB are every bit as bad as Fianna Fail for covering up thier lies, and robbing the citizens of Ireland to cover thier massive wages, the banks, the gambling bondholders and judges. Most should be in jail.

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Yardleypa | Oct 01, 2011, 03:05 PM EDT

Read david mcwilliams not krugman if you want to know whats going on

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LoyalCitizen | Oct 01, 2011, 11:42 AM EDT

All of these journalists seem to forget that we live in a society, not an economy...........Society is made up of people not pretentious subsidised American Corporations, who asset strip Ireland through traitorous Irish Politicians.

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gobdawpaddy | Oct 01, 2011, 09:49 AM EDT

Krugman is unfortunately correct in his opinion that reports of Ireland's recovery are way overblown. Ask the ordinary people in the street, ask the volunteers of the St Vincent De Paul Society, ask the people who man the friary in Dublin providing food to the city's hungry. The Irish tend to lose the run of themselves as they did during BBertie's fairytale a.k.a The Celtic Tiger, they were on top of the world and it would never come to an end. I must confess that I (like the global financial media) am impressed with steps that are being taken by Ireland's 'new' government. Michael Noonan and Enda Kenny appear to have a good head on their shoulders. I wish them the very best but I hope that the Irish electorate will never forget that it was the gobsh***s in Fianna Fail that got them into this mess, necessitating the current austerity measures.

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