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The Other Hand
House prices zooming up again. What is driving property values? Is more construction really the answer?
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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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Apple taxes. Windfall taxes. A podcast special
21:44|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?'Europe faces an existential crisis'. According to Mario Draghi, at least.....He's right.
28:48|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.It keeps raining cash on the Finance Minister. A big budget is coming.
27:35|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.It's raining: spend the rainy day fund now! Have Sinn Fein finally stumbled upon a good idea?
34:01|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 spendingWho is J D Vance? A podcast special with Professor Shane O'Mara
01:00:04|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'.Tax breaks on pensions: what are they for? Inheritance taxes: should they be 100%
35:49|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.Never mind the policy, feel the vibe! Why any focus on Kamala Harris' economics is besides the point - for now.
30:03|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.Is it time to cancel Twitter/X? The weirdness of Trump. The pound-shop Bond villain Musk
33:43|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 CarverRussia has been invaded: a story that doesn't figure on the front pages.And the latest economic news.