I think it’s tiresome the way countries in desperate economic trouble are treated as lab rats by pundits far away whose sole interest in their travails lies in their providing an argument to buttress favoured policies back home. It’s a pretty grim game, really. So when Paul Krugman spends a summer writing about Ireland’s enforced austerity he’s not really writing about Ireland at all. He’s arguing about the United States and never mind what the hell happens to the poor, miserable Irish. The worse things go for them, the better they go for the Krugman school. Tyler Cowen documents all this rather neatly.
This doesn’t mean that a return to economic growth in Ireland (while Spain remains sluggish) demonstrates the wisdom of austerity’s advocates. As Megan McArdle says it may be a decade before we can sensibly measure what "worked". This is inconvenient for journalism and hackery but there you have it. But even if austerity "works" in Ireland that doesn’t mean it must be a model for other coutnries whose peculiar situation may not be easily compared to Ireland’s.
Not that our Irish friends are in the clear yet. Not by any means at all. Recovery remains fragile (though winning the race to host Twitter’s european HQ is a useful, cheering, confidence-boosting measure). And Ireland, of course, remains vulnerable to events elsewhere over which it has no influence at all. Nevertheless, the return to growth, albeit after a hrrendous contraction, is a partial vindication at least of a view that admits that when the money runs out it is not always wise to pretend that it has not and carry on as you were before. This may be easier for Ireland – not least because Hibernia’s been here before – than for other countries, of course. There’s an element of copping-on to yourself.Tags: Age of Austerity, Economics, Hackery, Ireland