“What is a Minsky Moment, anyway?” asks Gerry Stembridge, a razor-sharp Irish comedian. “I’ve been reading about them in the papers and have often wondered”. Stembridge is putting the question to Paul McCulley, Chief Economist at Pimco, the world’s largest bond fund with over $200bn under management. Among the ten most influential economists on earth, McCulley is sporting a T-shirt and jeans.
If that’s not odd enough, the two men, Celtic comic and American financial whizz, are on stage in a theatre in Kilkenny, a bijou provincial city in South-East Ireland. It’s Saturday night and they’re facing a sell-out crowd – all of whom have paid to watch a debate on global economics and most of whom aren’t waiting until the interval to have a drink.
“Right – Minsky moments,” says McCulley, launching into a deeply technical explanation. We hear of the fabled post-War Chicago-born economist Hyman Minsky and his credit instability theorem. Minsky deeply admired the 19th century Swedish economist Knut Wicksell, we’re told, and developed a particularly influential post-Keynesian criticism of the neo-classical synthesis.
Stembridge, with the understatement and timing of a true comic, picks his moment, turns almost imperceptibly to the crowd and raises an eyebrow of bafflement. The gesture draws a few titters, stopping McCulley in his tracks. “Okay, let’s cut the crap,” exclaims Pimco’s finest, provoking a roar of laughter. “A Minsky moment is when the markets freak out, shares plunge big time and the shit hits the fan”.
The theatre erupts, loud applause punctuated by wolf whistles. And so begins a solid hour of riveting economic discourse, with plenty of audience participation and probing but, above all, a stream of side-splitting improvised gags.
Last weekend I was at Kilkenomics – a festival combining up-to-the-minute economic analysis with raucous, no-holds-barred comedy. It’s an unlikely mix, but it works. Maybe that’s because this unique hybrid event, dubbed “Davos with laughs”, is set in Ireland – a place where, even in the teeth of adversity, folk like to see the funny side.
Now in its fifth year, Kilkenomics attracts a high-powered crowd of speakers from leading financial institutions, central banks and top universities – together with the odd renegade dismal scientist like me. The heart of the agenda comprises two dozen or so discussions, with catchy titles describing serious underlying issues, such as “Apocalypse West” or “Kicking Arrears: Ireland’s Personal Debt Crisis”.
Each panel features a clutch of economists but is chaired by an Irish stand-up, who puts the technocrats through their paces. Before a well-informed and free-to-heckle audience, glib, fence-sitting, overly complex responses are exposed for what they are. The result is an aching face from having laughed so much and, more often than not, an extremely illuminating discussion.
“Who rules the world: monarchs, oligarchs or central bankers?” was the theme of Stembridge’s Saturday night session. “No-one is ruling – and that’s the problem,” says Martin Lousteau, Argentina’s former Economics Minister, sat alongside McCulley. “Political systems everywhere have become hostage to financial power, seriously lowering the quality of leadership”. Professor Bill Black, one of the world’s most respected bank regulators, agrees. “We’ve seen a regulatory race to the bottom over recent years, engineered by the big investment banks – and the Brits are proud they won”.
Professor Mark Blyth, an extremely distinguished Scottish economist based at America’s rather pukka Brown University, chips in with pithy gems. “Once policy-makers are captured by vested interests, they’re crap,” he observes from the stage, supping his pint. “Our governments have become craven bastards”. The session ends to rapturous applause – and the macroeconomic discussions continue until the small hours in the charming yet rowdy pubs that adorn Kilkenny’s medieval centre.
Kilkenomics was born out of Ireland’s traumatic deep-dive recession, after the 2008 collapse of Lehman Brothers. The “Celtic Tiger” economy took a bullet, contracting an eye-watering 6 per cent in a single year. While Ireland finally pulled out of recession in 2013, unemployment remains stuck at 11 per cent, with sky-high mortgage arrears and spending depressed by tax rises and falling wages.
Ireland, to be sure, has seen public spending cuts over the last four years some three times greater in proportionate terms than the UK government’s “austerity measures” are attempting over eight years. That’s the reality of what this country has endured. It’s also the reason Kilkenomics strikes such a chord and is rapidly becoming a part of the country’s popular culture. The scars of economic adjustment run deep – and one way the complex Irish psyche deals with suffering is to laugh in its face.
“We’ve been royally screwed by Brussels,” declares one heckler, to huge applause, before explaining, in considerable detail, why Ireland’s bail-out terms were unfair. “You’re right – this country was made a sacrificial lamb for the rest of Europe,” says McCulley, a man with unparalleled knowledge of global bond markets. “Why are we in the euro anyway,” shouts someone else from the audience. “It took us centuries to win our independence – and now we’ve given it up”.
Kilkenomics has an air of subversion. The star speakers are letting their hair down and many are a long way from home. Yet what I heard in Kilkenny was very different from Russell Brand. The panelists, after all, are people of massive expertise and experience. So the subversion is meaningful, rooted in authority and genuine understanding, not just crass, incoherent temper tantrums.
The 3,000-strong crowd who gathered at Kilkenomics, also, can’t be dismissed as naïve losers. This is no anti-capitalism rally. Most of those I met, from Ireland and beyond, were respectable middle-aged professionals, not short of a bob or two. “I feel the mainstream media is constantly feeding me a line,” one senior civil servant from Germany told me over a pint. “Geez, we’re treated like children,” remarked a Dublin-based Headmistress. “I learn more here in two days than I do in a year of watching television news”.