# Media coverage of the economic implications of Covid



## Duke of Marmalade (23 May 2020)

I see David McWilliams has a regular IT Saturday slot.  I thought of opening a thread dedicated to react specifically to that slot but I suppose it would be better if it was more generally to cover media coverage of the economic implications thus including commentators like Colm McCarthy, Stephen Collins, Dan O'Brien etc.
This opener is however focused on the DMcW piece in today's IT.

The thrust is that the economic response must be unconventional.  That of course is DMcW's signature tune - how he can think outside the box unlike those mainstream economic commentators.  Previous hits on the meme were "blanket guarantee a master stroke", "exit the euro", "forgive all mortgages", "drop helicopter money".

In today's piece it is actually difficult to spot the stroke of genius though the tone suggests that he believes it is there.

My understanding is that he is suggesting that the interest rates on all existing loans should be set to the current ECB rate, i.e. effectively zero per cent.  He really likes "all in" solutions, no room for nuance: guarantee all bank deposits, exit the euro, forgive all mortgages, give everybody a dollop of helicopter money.  The proper management of this unprecedented economic situation will need much more subtlety than that.
McWilliams' problem is that he has typecast himself - he has to pull unconventional rabbits out of a hat every time.  I suppose he sells papers, after all I do read his column but for informed commentary I rely on the other names I mentioned above.


----------



## joe sod (23 May 2020)

Duke of Marmalade said:


> McWilliams' problem is that he has typecast himself - he has to pull unconventional rabbits out of a hat every time.



I had a quick look at it but its behind a paywall. He focussed in on Pascal Donohue maybe because Pascal shot down his big borrowing idea with ease, in other words david mcwilliams is now an irrelevancy to the movers and shakers and the guys that make the big decisions. He is like a football pundit long past his career as a professional footballer and now being ignored by the guys on the pitch. He is becoming like the Eamon Dunphy of finance good for a rant and sound bites but irrelevant.


----------



## Sunny (23 May 2020)

Yeah waste of time reading him now to be honest. Worst part is that the guy is really intelligent and can make good points. Unfortunately they get lost in the celebrity chasing headlines. I think there are a few economists who miss being called every day for media interviews like during the financial crisis. There will be a few doctors and professors of odd sounding things doing the same after this crisis.


----------



## Duke of Marmalade (24 May 2020)

It has dawned on me that McWilliams has no fans in this parish, and me thinking I was being iconoclastic.  As a result this thread will probably run cold.


----------



## Purple (24 May 2020)

I think voices like McWilliams are important, even if they just cause people to question the mainstream views of how to react to this or any other crisis. 

He’s entertaining and gets more people talking about economics, even if only to conclude that simplistic silver bullet solutions are rarely the solution.


----------



## Duke of Marmalade (25 May 2020)

Purple said:


> I think voices like McWilliams are important, even if they just cause people to question the mainstream views of how to react to this or any other crisis.
> 
> He’s entertaining and gets more people talking about economics, even if only to conclude that simplistic silver bullet solutions are rarely the solution.


Ahh!  I thought I might flush out a closet McWilliams fan  
Thankfully these days nobody that matters takes him seriously.  O'Donohue had no problem immediately rejecting his (not original) helicopter money idea.
Unfortunately it was not always so.  In 2008 Lenihan consulted the oracle (as He is fond of reminding us) and the result was the blanket guarantee of all deposits including those in Anglo and INBS. A move which McWilliams immediately acclaimed as a masterstroke, His masterstroke.


----------



## 24601 (25 May 2020)

I find Eamon Dunphy's podcast, The Stand, is actually very good in terms of COVID economic discussion. He often has episodes with Dan O Brien and Chris Johns on together. Definitely worth a listen. 

McWilliams is a total quack at this stage. I'm guessing he has some sort of Winning Streak type spinning wheel in his home where each segment has a more bizarre, out-there idea than the next, and he just gives that a spin before putting pen to paper or recording a podcast. 

What's the story with Colm McCarthy? I always found him very insightful and straight-talking when it comes to the public finances and enjoy his articles. Has he had any formal government advisory role since An Board Snip Nua?


----------



## Duke of Marmalade (25 May 2020)

24601 said:


> I find Eamon Dunphy's podcast, The Stand, is actually very good in terms of COVID economic discussion. He often has episodes with Dan O Brien and Chris Johns on together. Definitely worth a listen.
> 
> McWilliams is a total quack at this stage. I'm guessing he has some sort of Winning Streak type spinning wheel in his home where each segment has a more bizarre, out-there idea than the next, and he just gives that a spin before putting pen to paper or recording a podcast.
> 
> What's the story with Colm McCarthy? I always found him very insightful and straight-talking when it comes to the public finances and enjoy his articles. Has he had any formal government advisory role since An Board Snip Nua?


Yes Colm McCarthy is sound though he has a bit of a bee in his bonnet that the ECB shafted us on the bail out.
I was puzzled by a thread in his recent posts that we were facing a "supply side" shock.  To me and to other commentators it looked so much like a demand side shock - people weren't spending.  But I think I now see what he means.  If it was a demand side shock then McWilliams helicopter money might at least have some merit.  But it is not that demand is lacking, it is that supply is forbidden, no amount of helicopter money will open the pubs.


----------



## Purple (25 May 2020)

Duke of Marmalade said:


> Ahh!  I thought I might flush out a closet McWilliams fan


 How dare you!!



Duke of Marmalade said:


> Thankfully these days nobody that matters takes him seriously.  O'Donohue had no problem immediately rejecting his (not original) helicopter money idea.


 I'm a fan of Pascal alright.


Duke of Marmalade said:


> Unfortunately it was not always so.  In 2008 Lenihan consulted the oracle (as He is fond of reminding us) and the result was the blanket guarantee of all deposits including those in Anglo and INBS. A move which McWilliams immediately acclaimed as a masterstroke, His masterstroke.


It was a masterstroke; it made him a fortune.


----------



## Firefly (25 May 2020)

Duke of Marmalade said:


> I see David McWilliams has a regular IT Saturday slot.



I subscribe to the IT and read his contributions most Saturdays. On the whole I find his posts worth a read however I don't agree with much of his solutions. One idea he has mentioned before however is that of the government receiving shares in the multinationals operating here with the idea of building up a sovereign wealth fund. I think this could be worth exploring.

Last Saturday he referred again to a term he is trying to coin called _Pandession_. He has mentioned it numerous times so I can only assume he has a book in the works


----------



## Purple (25 May 2020)

Firefly said:


> He has mentioned it numerous times so I can only assume he has a book in the works


I was thinking the same thing!


----------



## 24601 (25 May 2020)

Firefly said:


> I subscribe to the IT and read his contributions most Saturdays. On the whole I find his posts worth a read however I don't agree with much of his solutions. One idea he has mentioned before however is that of the government receiving shares in the multinationals operating here with the idea of building up a sovereign wealth fund. I think this could be worth exploring.
> 
> Last Saturday he referred again to a term he is trying to coin called _Pandession_. He has mentioned it numerous times so I can only assume he has a book in the works



He'll remind us all ad nauseam how he coined the phrase á la "breakfast roll man" if it gains any sort of traction. He's a serious egomaniac. He must mention his prediction of the bubble bursting and his VIP consultation with Brian Lenihan about 3 times a week.


----------



## Purple (25 May 2020)

24601 said:


> He'll remind us all ad nauseam how he coined the phrase á la "breakfast roll man" if it gains any sort of traction. He's a serious egomaniac. He must mention his prediction of the bubble bursting and his VIP consultation with Brian Lenihan about 3 times a week.


Maybe, but I always look for the good in people and not take strong positions on things.


----------



## Firefly (25 May 2020)

24601 said:


> He'll remind us all ad nauseam how he coined the phrase á la "breakfast roll man" if it gains any sort of traction. He's a serious egomaniac. He must mention his prediction of the bubble bursting and his VIP consultation with Brian Lenihan about 3 times a week.



I love all the references he makes to having worked in the Central Bank. You'd swear he was running the place.....

Oh, and the soccer stuff too! And the Dalkey stuff come to think of it!!


----------



## joe sod (25 May 2020)

24601 said:


> He'll remind us all ad nauseam how he coined the phrase á la "breakfast roll man" if it gains any sort of traction.


in fairness to him "breakfast roll man" really nailed it at the time but it wasn't really that original as he borrowed it from _"white van man"_ invented by the UK tabloids to describe a demographic that read their papers and swung elections in the UK, eg it was _"white van man"_ that won it for Tony Blair.


----------



## Purple (26 May 2020)

McWilliams is back peddling his new catchphrase and his "outside the box" thinking is to borrow our way out of the coming recession. 
His latest offernace reads like a Leaving Cert answer.


----------



## Baby boomer (26 May 2020)

It's all about promoting brand McWilliams. He's in the entertainment business, not economics. He's a celebrity who happens to be an economist rather than vice versa.

Not that I'm objecting, btw.   Just accept it for what it is, mildly entertaining.


----------



## Firefly (26 May 2020)

Purple said:


> ... to borrow our way out of the coming recession.


I am hearing this more & more. The argument is usually that it makes sense to borrow as rates are so low. What is never mentioned is that governments never actually repay the debt but roll it over....we are therefore at the mercy of the markets at a future date to give us a decent rate for the money we borrow today.

If we employed a counter-cyclical strategy of increasing government spending when times are tough but cutting government spending when times are good I would say fair enough. But in Ireland there is even more pressure put on the government to increase spending when times are good "Sure, can't we afford it and deserve it?"


----------



## Cricketer (26 May 2020)

McWilliams first mentioned 'pandession' in the IT on 16th May. However, it's mentioned here on 22nd April. Did he really coin it?


----------



## Purple (27 May 2020)

Interesting view on ending the Lockdown from two guys at The Centre for Evidence-Based Medicine  in University of Oxford here.


----------



## Duke of Marmalade (30 May 2020)

David McWilliams in today's IT. 
He has promoted the situation to the *Great *Pandession. Not much economic content.  Riffing on about the Black Plague/the Renaissance; the Spanish Flu'/the Roaring Twenties; the 1958 Flu/the Swinging Sixties.  Somewhat tenuous connections but a reasonably entertaining bit of spoof nonetheless.
The economic content?  We should ignore the "austerity jihadis" (add that to breakfast roll man) and let the ECB print the money.  It's almost inside the box these days, is he losing his grip?

There was a time of course when McWilliams castigated Quantitative Easing. I remember an episode of his Punk Economics cartoons which was notable for producing an enormous amount of zeros, representing the quantity of money the ECB were printing.  Heck, we are all allowed to change our minds.


----------



## Duke of Marmalade (13 Jun 2020)

Our hero was fairly letting fly with the silver bullets today.  What we need is a sovereign wealth fund just like Norway.
Where's the oil?, I hear you ask. The multinationals stupid. We should increase our annual tax take from €8bn to €15bn.  But we would take it in share options.  That way it costs the multinationals nuffin' and we seed our wealth fund with a stake in the most profitable companies on the planet.  But that's only to get us kick started.  We now gear up to the hilt at 0.28% p.a. and buy more of the stock of these companies.  That is what the rich people do, he says. Is that what the rich people do?
But here's the coup de grâce:


			
				David McWilliams said:
			
		

> The Irish sovereign wealth fund could be used not as a pension fund but as a start-up fund.  The equity in these companies would be pledged to every citizen proportionally and could be used as collateral for start-up business.


Does anybody understand this? What does proportionally mean?  What does pledged mean?  What would the gal on the Ballymun omnibus do with her proportional equity pledge?
He was so carried away with these ideas that he forgot to mention the Great Pandession.


----------



## Duke of Marmalade (2 Jul 2020)

McWilliams is at it again in last Saturday's IT.
The government can borrow at near 0%.  It should use these cheap funds to "refinance" the entire 75% State owned AIB mortgage book to bring the average mortgage rate down from 4% to 0.5%.  The other lenders would then be forced to follow suite.
The linkage between the State's borrowing rate and the fact that AIB is in the business of lending is an illusion and He knows it.  This would simply be a major transfer of wealth to AIB mortgage holders on the back of cheap State lending.  How unfair is that?

Yes we will need to avail of these low borrowing rates to address the fall out from COVID.  But it must be much more surgically and fairly targeted. Such a selective bonanza to a narrow constituency, for many of whom this would be a totally unnecessary windfall, would be an outrage, presumably unconstitutional.

Firing silver bullets at mortgages is a well worn tune in McWilliams' repertoire best exemplified by his recommending that ALL mortgages in the State should be forgiven so as to provide a stimulus to get us out of the financial crisis.


----------



## WolfeTone (2 Jul 2020)

Duke of Marmalade said:


> Yes we will need to avail of these low borrowing rates to address the fall out from COVID. But it must be much more surgically and fairly targeted. Such a selective bonanza to a narrow constituency, for many of whom this would be a totally unnecessary windfall, would be an outrage, presumably unconstitutional.



My goodness Duke, we are in agreement, twice in one day! (Is there an eclipse due or something ?) 

Well, maybe not. 

The McWilliams is clearly an intelligent chap, full of beans and has done very well for himself to forge a celebrity broadcasting career from what was traditionally viewed as a topic for duffle coats. 
I don't read his column but tune in occasionally to the podcast. Some interesting musings such as the off-spring of Irish descendants in the Caribbean being referred locally as 'Reds' due to the lighter shade of skin that could get sunburn. 
If you recall Morgan Freeman's character in the Shawshank Redemption was called 'Red', when asked why, he replied 'I dunno, maybe it's because I'm Irish'. 

Anyway, the podcast is a tinge cringe worthy at times with overindulging in his vast knowledge and prompted by his sidekick John "_but Mac!... what does all this mean?" _Davis.

Two economic proposals have emerged in recent years that have caught my attention. _The Deficit Myth _by Stephanie Stapleton dealing with Modern Monetary Theory, and, the sloppily titled '_Doughnut Economics_' by Kate Raworth, re-examining and developing the circular flow of income to include the limitations of earths environment. 

Both are pertinent and timely texts to the situation we, and rest of world, find ourselves in. 
In a nutshell, _Deficit Myth _exposes a number of conventional falsehoods about the national debt (we can't afford to borrow additional €600m to resolve housing crisis, but suddenly we can find €30bn to save the country) and _Doughnut _exposes the inefficiency of economic measurements like GDP.
All good, thought-provoking stuff. Yes, we need to borrow, and yes it needs to be targeted more strategically, environmentally sustainable way. 
McWilliams is talking fluff.


----------



## Purple (3 Jul 2020)

WolfeTone said:


> My goodness Duke, we are in agreement, twice in one day! (Is there an eclipse due or something ?)
> 
> Well, maybe not.
> 
> ...


The "If only we just..." school of populism has been around since forever. McWilliams is just one of its many members.
The problem with housing is we don't have the people to build them using traditional methods and no matter what we do it takes 5-10 years to get a good flow of housing in the economy. Borrowing to build will solve nothing. I agree with much of your post though.


----------



## WolfeTone (3 Jul 2020)

Purple said:


> The problem with housing is we don't have the people to build them using traditional methods



It was probably a bad example. 
But the critical point being is that the printing presses are being turned on. Boris has committed to going on a public sector spending bender which can only be positive from an Irish export point of view (notwithstanding any calamitous outcome from Brexit negotiations). 
The Germans too are throwing this fiscal prudence ideology to wind with record levels of stimulus. 
And with ECB buying up 20%(?) of new government debt, money, theoretically is going to be plentiful and cheap. 
It remains to be seen how effective it will be against combating the decline attributable to Covid19.


----------



## Protocol (4 Jul 2020)

WolfeTone said:


> It was probably a bad example.
> But the critical point being is that the printing presses are being turned on.



Note that QE started several years ago.

The Fed started first, back in 2009.

The ECB started in 2014/2015.









						Asset purchase programmes
					

outright monetary transactions




					www.ecb.europa.eu
				




The ECB paused during 2018-2019, then QE re-started at the end of 2019.


----------

