The Irish Financial Crisis

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Firstly, I’m Irish, and subsequently writing about this is difficult.
My late Grandfather, used to warn me that the Irish debt problem was a serious one. He passed away before all this crisis happened but he would probably feel a smug satisfaction ‘I told you so’.

A recent Vanity Fair piece by Michael Lewis looks in depth at the crisis. The statistics he quotes seem obvious now, how did everyone get this all so wrong?

Irish people will tell you that, because of their sad history of dispossession, owning a home is not just a way to avoid paying rent but a mark of freedom. In their rush to freedom, the Irish built their own prisons. And their leaders helped them to do i

Is partly the answer. The Irish people had a hypothesis that there was some mathematical theorem which led to house prices increasing for ever and ever. This is mass Confirmation Bias
Land is a very important part of the Irish psyche, Catholics were banned from owning land for at least 2 centuries, and the history of emigration, poverty and the Irish Famine are all tied up in this ‘dispossession’.
The comedian Tommy Tiernan used to say ‘Whats Irish?, Nobody had a clue, we’re just NOT English’. And this is also mentioned in the article.

Everywhere you turn you see both emulation of the English and a desire, sometimes desperate, for distinction. The Irish insistence on their Irishness—their conceit that they’re more devoted to their homeland than the typical citizen of the world is—has an element of bluster about it, from top to bottom.

I’m not sure what the differences between Irish people and English people are, I do know that when I live in England I’m very keen to accentuate my Irish Nationality. I don’t feel that the differences are as large as those between me and say an Algerian. Nationality and Patriotism are of course emotionally charged issues, and I’m not sure yet how exactly to write about them.

Commenting on Brian Lenihan (the only Irish Political leader who still has public respect) Michael writes:

Anyone who has been anywhere near an Irish Catholic family knows the member who has had the most recent run of bad luck enjoys exalted status—the right to do pretty much whatever he wants, while everyone else squirms in silence.

Something I’ve never explictly thought about, but this is completely and utterly true about Irish Catholics. Families are very important to us, and we do have this confusing blend of compassion and stoicism.

McWilliams told me that he sensed that the mental state of the Department of Finance was “complete chaos.”

David McWilliams is a well know media personality in Ireland. He also knows something about Economics, I disagree with some of his Monetarist ideas, but he at least has credibility and the kind of expertise that should be valued. The thought though of a Finance Minister going to an Economists house to discuss his concerns is very very scary, and I must admit I’m frankly not surprised.
The further lying and manipulation of the facts in the article is well worth reading – specifically the Merril Lynch debacle. The ‘market’ has unfortunately got God-like status in modern society. I hope Iceland, Ireland and Greece are evidence the Market doesn’t get everything correct.

My favorite quote though is:

People who had made a private bet that went bad, and didn’t expect to be repaid in full, were handed their money back—from the Irish taxpayer.

And on the difference between Irish people and Americans:

wo things strike every Irish person when he comes to America, Irish friends tell me: the vastness of the country, and the seemingly endless desire of its people to talk about their personal problems. Two things strike an American when he comes to Ireland: how small it is and how tight-lipped. An Irish person with a personal problem takes it into a hole with him, like a squirrel with a nut before winter. He tortures himself and sometimes his loved ones too. What he doesn’t do, if he has suffered some reversal, is vent about it to the outside world. The famous Irish gift of gab is a cover for all the things they aren’t telling you.

The ending involving a man throwing eggs at a CEO and then going on a holiday is very amusing. No need for fuss (Irish people hate fuss) I’ve done what I had to do.

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