Ireland on the edge

Posted on Monday, January 31, 2011 at 08:45 AM

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After a week of political upheavals the baby boomer generation that comprises most of our current government seem to think the worst is - or soon will be - over.

They predict that Civil War voting reflexes will kick in, as they always seem to before general elections, and calmer heads are probably anticipating a return to some kind of normalcy soon.

I'm not so sure. I think the experience of seeing the pillars of Irish society collapsing, one after another, may have a radicalizing effect on younger Irish voters.

First they witnessed the seemingly endless abuse crisis in the Catholic church, which exposed decades of unspeakable cruelty and abuse lurking just beneath the tourist board facade. Those revelations indicted Irish society from Independence to recent times. We were not who we said we were. We were not even close.

Then comes the country's profoundly shocking near total financial collapse. How could it have happened? The whole world lined up to tell us what we'd done wrong. Bill O'Reilly and his fellow travelers blamed socialism.

But O'Reilly has it backwards. It wasn't socialism, it wasn't high taxation or liberal government programs that harpooned Ireland's economy: it was unfettered capitalism that sunk the Celtic Tiger, ironically enough.

A new generation of the Irish have discovered that the free markets don't lift every boat or solve every social and political ill. They have learned that banking regulations are a good idea. They have learned that giving the nations car keys to fat cat bankers and property developers is an astonishingly stupid thing to do.

And now that those fat cats - and their cronies in government - have driven the nation into a deep ditch it's droll to note how those the former poster boys of capitalism and excess now suddenly see the point in spreading the wealth.

And when I say spreading the wealth, I mean the bill of course. Socialism becomes mightily attractive to our former wealth generators when it gives them a handy option to stick the Irish people with the bill. If you want to talk about socialism in Ireland these days then you should make it clear you're really talking about debt consolidation.

The most recent pillar to fall has been young Irish people's faith in their own political parties - and worse. That's why I suspect we're in for a roller coaster this February and through 2011.

A generation of committed and internet savvy young Irish people have reached maturity in a prosperous nation they had no reason to assume would collapse so decisively. Now they're furious about what's happened to their nation and I suspect they won't be fobbed off with emigrant wakes and tearful fare thee well's.

Losing your future to emigration is a terrific reality. So are the pay cuts that have begun to bight the nations pay checks. But losing the life you thought was yours is about as painful an experience as can be endured.

The Irish people are now in the position of paying for a decades long rip off they actually had very little part in. You don't have to be Nostradamus to recognize that somethings got to give.

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hollabackgurl | Jan 31, 2011, 11:12 AM EST

Milton Friedman has been dead since 2006. If he's your go-to economist for insights on Ireland's financial collapse then you must be using a Ouija board. In Ireland, regulators looked the other way because the country was trying to attract foreign business, and because of cronyism: bankers and property developers had close ties to the ruling party. The lesson is that letting bankers do what they want is a recipe for disaster.

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OurselvesAlone | Jan 31, 2011, 10:57 AM EST

@olovely Milton Friedman is my go-to Nobel prize winning economist, not the resident bozo of the NY Times, who after 9/11 wrote that the terrorist attack leveling the WTC might lift the economy out of recession by the spending generated from the rebuilding of the WTC complex. Economist Walter Williams asked Krugman this question in print: If blowing up buildings helps stimulate economic activity, then why are Belfast and Beirut not economic powerhouses today after the last 30 years? If you to be amused by a clown (i.e., Krugman), I suggest you join the circus instead.

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olovely | Jan 31, 2011, 10:33 AM EST

*That should read underperforming banks should be allowed to fail. But that's not what happened. Ireland was made an example of by the IMF and the EU.

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olovely | Jan 31, 2011, 10:31 AM EST

I'll take the insights of a Noble Prize winning econonmist over yours, Ourselves Alone (since they're filtered through a right wing ideology that's a loss to explain how unfettered capitalism, zero banking regulations and political cronyism could possibly fail). Under capitalism, as you say, under performing banks don't fail - but tell that to the IMF and the EU and the cabal of right wing economists that sounded the alarm bells and pressured Ireland into paying.

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OurselvesAlone | Jan 31, 2011, 10:16 AM EST

Cahir Joining the euro and the resultant flood of cheap money from banks in other EU countries was the primary cause of the real estate bubble, not "unfettered capitalism". The govt's guarantee of deposits and subsequent assumption of bank loans sounds a lot more like "state-ism" than capitalism; under capitalism, mismanaged firms go out of business, they are not bailed out and propped up by the state. The outsourcing of the country's credit policy of the Central bank of Ireland to Brussels was a significant factor in the real estate bubble as well and more importantly, the ability of the Central Bank to control inflation in Ireland. The resulting high costs of doing business in Ireland will hinder capital formation and job growth in Ireland over the next several years, delaying the recovery from the real estate debacle.

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