For those of you unfamiliar with the Irish media, a significant amount of economic and financial policy is promulgated via the national broadcasting radio, RTE Radio. Counter to this outlet of information, is Professor Morgan Kelly of the University College Dublin School of Economics, who forswears television and grants very few interviews, holding his council for months at a time before releasing a few thousand words in a weekend paper.
Kelly’s predicitions of the 2007 end of Ireland’s property boom have made him something of an anti-celebrity on the island. Nicknamed ‘Dr. Doom’ after the publication of his bitterly scathing indictment of the Irish banking bailout last November, Kelly nonetheless is held in such regard that after his latest barrage against the handling of the banking crisis, which was published on Saturday, its main target – Patrick Honohan, the governor of the Central Bank of Ireland – rushed to the airwaves on Sunday morning to defend himself.
The article is a master class in beating the bejesus out of a person using nought but words. Kelly writes that Honohan’s “miscalculation of the bank losses has turned out to be the costliest mistake ever made by an Irish person”.
Kelly’s proposition of walking away from the bailout, he admits holds no political potential. However, Ireland is already projecting a government deficit of €14.8 billion, or €10,000 per household in the country. Clearly this position is not maintainable.
What is becoming increasingly and uncomfortably obvious is the fact that those European governments which run a budget deficit are under the thumb of its lenders, and when there are no lenders left (which, for Ireland, there aren’t) and only the EU is left, then those governments are under the thumb of the EU.