The powerful and elite having a disconnect between their actions and the consequences of those actions? This has been going on for centuries, all over the world. It is not just applicable to the recent Irish situation and subsequent austerity.
“Enter the Legends of the Fall contest run by the Irish Times”
€400 for 1500-3000 words? Now that’s austerity!
p.s. one of the benefits of working in PR is that you get to eat in some great places. Last night I ate in a new place set up in Cadaqués ((NE Spain, on the coast/Costa Brava) by 3 ex-elBulli chefs. Amazing food and amazing value. Get there before they get their M* stars.
“Thanks for that, Marie Antoinette. Here’s hoping you meet a similar fate.”
What? Having a champagne glass made in the shape of my chest? 🙂
Would you settle for a broken one buried in it?
Am I alone in beginning to find simplistic representations of the Irish property ‘bubble and crash’ just a little bit tiresome? Here again we have another twist on the narrative of Ireland’s crash, this time as a pseudo- morality play, in which ‘angels’ (the masses) were duped by ‘demons’ (the bankers and their fellow-travellers in the cosy elites who have laid claim to all our resources for their own benefit in perpetuity).
Sure, the Anglo boys were twerps. The tapes provide ample confirmation of that, and of their panic and desperation as the reality began to dawn on them that their particular ‘party’ was drawing to a close. But a brief check on their backgrounds might have revealed that they hailed from the ‘wrong side of the tracks’, so to speak, in respect of the traditional lineage of the Irish banking elite.
I was initially confused too by the author’s portrait of Irish society. I don’t recognise it and initially assumed that the society being described was New York’s upper echelons, or some other alien place.
Perhaps I’ve been leading too sheltered an existence for the past 57 years, though I don’t think so. I seem to recall having lived through an extraordinary socio-economic change since the early 1970s that has transformed this state from a society of relatively impoverished small farmers, with a few underdeveloped urban enclaves, into a relatively typical European society. To be sure, Ireland suffers from ‘small country syndrome’, as the political scientists term it. So the trend towards a consensus mindset on whatever is the latest fantasy that generally takes hold, and intolerance of any dissenting voices, which this syndrome engenders, did us no favours as we primed the property bubble. It does us no favours, either, as it bubbles away in respect of a wide range of social and economic issues temporarily driven below the parapet by the current crisis. Finally, ‘scepticism’ is a more appropriate label than ‘cynicism’ to attribute to the average Irish person’s response to the witterings of authority, political or otherwise. Maybe there were some among us who temporarily lost that national character trait; but even that is debatable.
This crisis, and how it plays out in Irish society, is more nuanced and complex and multi-layered than any ‘four legs good, two legs bad’ narrative can allow for. In the end, such narrative approaches are as self-delusional as the ‘we’re rich’ delusions of the bubble years, and no help at all.
@ PR Guy
Enjoy the champagne! I’m sure you’ve worked hard enough for it.
Only one small part of the overall Tiger days but this news story has always struck me as problematic for the “elite” narrative and consistent with Veronica’s point about the backgrounds of the bankers.
Veronica
The economy is always a morality play though
at least according to the second link here
One thing the NY times piece points out very correctly is the essential amorality of the Irish Ascendancy. However, he wrongly concludes that this was caused by a disconnect between action and consequence. In reality, the lack of consequence above all is the cause of amorality in Irish public life.
Here’s a hypothetical: Suppose there were roving gangs of pensioners, up in arms over their 0.6% levy, brandishing meat cleaver and prowling the streets for bankers. In such a situation, would AIB have been so quick to put €1.1 billion of their public bailout money directly into their own personal pension fund? I think not.
Consequence. Consequence is the only true restraint that can tame the criminal spirit. This applies as well to pickpockets as bankers. David Drumm and Sean Fitzpatrick laughed — laugh — because there were no consequences for them. So too did the bribing developers and bribed councillers of Dublin as they torpedoed rational city planning for profit. They are all amoral because amorality and crime pay in Ireland, and in the absence of a competent legal system, bad behaviour will continue to drive out good.
I find French’s argument unpersuasive as it relys on the notion that “we all wen’t mad”. That we all bought into the housing boom. An easy mistake for some in the Dublin “scene” to make. In fact, most of us did not party. We did not approve of the housing madness and we did not take part. Yet we are now the ones expected to pay, while amoral criminals escape without consequence.
I also find the notion that the Irish elite are somehow “trapped” in pre-ordained lives to be nothing short of offensive. These people chose their lives. They chose to be criminals, to defraud and extort money from the rest of society. The executives and directors of Anglo, AIB, BoI, PTSB, and Nationwide chose to make their institutions insolvent, just as the Irish Government and civil service chose to raid public money to bailing out the same.
It is the rest of us who have been trapped in a preordained penury, destined since at least 2000 to pay the debts of those who stoked the boom. We haven’t been betrayed, we’ve been exploited.
@ veronica
You are not alone! There is an “elite” in Ireland but, as in any Western democracy, it is a very big tent i.e. rent seekers of every description who were, and many of whom still are, taking more of the national cake than their contribution deserves.
No doubt, there is a great artistic work somewhere, or in gestation, which will pull together not just a consensus but some penetrating insight which will sum up the era. This Tana French contribution is not it.
Rather than the narrative of a desperately poor people suddenly becoming rich, a system of limited accountability, with a poor standard of public representation, the political muzzling of civil service policymakers to avoid any hint of dissent, ministers incapable of making decisions without the crutch of external reports from conflicted commercial interests, coupled with a weak media, was a recipe for trouble.
The continuing lack of interest in reforming outdated systems benefits elites but reflects a common attitude.
A tribunal sits for a decade and a half on planning corruption, through boom and bust, and the system that makes land scarce in a country that has a low level of urbanisation, remains untouchable. Lawyers become multimillionaires from the process and the few related court cases collapse.
IBRC, the successor to Anglo was only shut down as part of an EU deal and it had most of the pre-bust managers still in place. 7 senior executives had pay packages worth more than €500,000 – – running an entity responsible for debt collection and legal functions.
Figures issued to Fianna Fáil TD Michael McGrath in response to a Dáil question last November showed that there were 12 staff at IBRC in receipt of remuneration packages of €300,000-€399,000, 24 on €200,000-€299,000 and 44 on €150,000- €199,000. The packages included salaries, pensions benefits and allowances. Some 146 IBRC staff earned €100,000-€149,000, while 774 earned less than €100,000.
It’s well to remember that the real economy was slowing before the property market was let rip.
The real economy peaked with the dot.com boom and Patrick Honohan has pointed out that “banks had not been central to the financing of the export-led Celtic Tiger period of the Irish Economy which ended about 2000..From 2003 the banks leveraged their local resources with enormous borrowings from abroad (easily available due to the global savings glut, and also to the lack of exchange rate risk for euro borrowing). At the end of 2003, net indebtedness of Irish banks to the rest of the world was just 10% of GDP. By early 2008 that had jumped to over 60%.”
Another striking statistic was that less than €200m was available annually for venture capital investment in Irish business, while the windfalls of the property boom were going into overseas investment coupled with bank credit, making the Irish second to the Germans as Europe’s top investors in commercial property.
“The republic that was created from the ashes of the rising was a perversion of the human rights ideals of 1916,” the outgoing Ombudsman and Information Commissioner Emily O’Reilly said Sunday at the MacGill summer school.
She cited Peter Sutherland in her speech — who also was a beneficiary of the republic of patronage!
MH
What ‘human rights ideals’ is the lady referring to? 1916 was not about a struggle for ‘human rights’ by any stretch of retrospective construction or historical revisionism. Still, reports of her speech suggest it was far more realistic in its appraisal of what’s going wrong in our society than ‘the best little country to live in’ trope of the Taoiseach’s address. Time to start looking out for travel deals for 2016, I think – in the interests of sanity, six months abroad might be advised.
@ Veronica and Michael Hennigan
The following sentence leapt out of this Independent report.
‘”Anglo tapes were shocking,” says Aynsley’
… “He said some politicians seemed to object to the bank’s efforts to force some borrower [sic] to repay loans.” …
Er, which politicians objected, in what way, to IBRC attempting to get whose loans repaid?
In the long run, the value of an asset must be linked to the income that can be generated from it (rent in the case of a property,dividends in the case of shares). It is quite possible for individual assets to shoot up in price since residential areas can become more fashionable and companies can have very successful products. But in aggregrate, share and property prices are constrained by the growth rate of the economy, which in turn depends on the stock of productive capital(new factories etc etc). Rents cannot rise faster than incomes for long before no one can afford to rent. On the same basis, if house prices outstrip GDP, more and more of a homebuyer’s income must go to service the mortgage. This cannot last.
At the peak BTL properties were been valued at 1% yields.
Tana French’s article is a an extremely facile description of Ireland and the Irish crisis. It represents the hallmarks of a 1st year sociology student asked to write a 1,000 words on a Marxist interpretation of the financial crisis in Ireland.
The article can be summed up pretty easily.
The Elite run Ireland. Ireland is a small country. A small cabal of Elite people who play golf created a society where people felt there were no consequences to their actions. The middle classes in Ireland were unwoken victims who were led by this elite and equally began too feel that their actions were without consequence.
Solution: Revolution
@Veronica
“..Am I alone in beginning to find simplistic representations of the Irish property ‘bubble and crash’ just a little bit tiresome? Here again we have another twist on the narrative of Ireland’s crash, this time as a pseudo- morality play, in which ‘angels’ (the masses) were duped by ‘demons’ (the bankers and their fellow-travellers in the cosy elites who have laid claim to all our resources for their own benefit in perpetuity)..”
It’s not so much that the angels were ‘duped’ but as I’ve suggested here countless times it was the lack of understanding of the effect of bank money supply creation, markets and price what ultimately has us all in an economic tizzy.
It was this lack of understanding which ultimately drove the credit creation bus. This daft notion that excess savings simply had to find a home and Ireland Inc. was a perfect fit is frankly nonsensical because had the bankers understood what was actually going on with regards to the underlying pricing in the market they would have called halt long before the ‘crash’ came. No amount of excess savings in the system could make property deals yielding less than 1% ever make sense.
It was the lack of understanding, greed and failure to adhere to consumer codes on the behalf of the bankers which was the undoing of us. That is not to say that all those working in banks at the time bought into this notion of ‘utopia’ as is described. Legions of bank employees had severe difficulties with what was going on but like most organizations the time and ability to have ones voice heard is often dulled and smothered by bonuses and ongoing job security and the like.
So you may find it ‘tiresome’ that the debate continues but sadly it has to, because the root of the problem has yet to be dealt with and that lies in the fact that the property market was simply allowed to get out of control by those who ought to have known better. Like it or loathe it the average Joe consumer cannot afford to buy goods which have been mis priced. All the recent eveidence is pointing in that direction.
Equally the representation in the article with regard to the lost hope bit is a bit nauseating I’ll grant you that, however there is a reference to the less than qualified associates of the so called elites being able to slip up the professional pole, because that’s the way it is, sort of thing. I disagree with that analysis.
I have worked in many organizations including some of the country’s and world’s biggest and have been involved in many if not countless employment drives and I can honestly say that in all that time I was never involved in any interview process or otherwise where favouritism could ever have been proven, shown, implied and certainly not exercised with regards to any position. Never.
So I absolutely dispute what’s suggested in the article and particularly the implication that this process is somehow endemic. Wrong. So the following as stated I believe is complete nonsense insofar as my experience testifies.
“…If you’re a banker and your golf buddy’s kid wants to be a banker, then it doesn’t matter if the kid is an idiot, or if he kills cats for kicks: you’ll take him on, and you’ll keep him on..”
Don’t get me wrong – many that came through the bank doors whilst proclaiming to be best qualified, soon found that the allure of money had the effect of quelling their best asset namely their brains.
@ YoB
Great post! Your arguments are persuasive, obviously made on the basis of experience, and a helpful contribution towards understanding how things work in certain elite circles. I would also agree with many other points made by posters who have critiqued this article. Just one thing: my own problem is not with having a robust discussion about what went wrong in our society – the amoral business culture, regulatory failure, political hubris and negligence, the inevitability of the ‘bust’ etc, – on which debate and inquiry must go on, hopefully in parallel with a grown-up discussion about ‘what sort of society we want to have when we get out of this’ and what actions/ infrastructure/ reforms etc. must we contemplate in order to ensure we have some chance of achieving that state? My irritation springs from flawed analysis which is based on either willful ignorance, or deliberate hijacking of the narrative to a simplistic ‘angels and demons’ paradigm that inevitably requires shoehorning facts to fit the chosen theory.
@John Kennedy
I hope you’re wrong!
following Beckett:
..
@ YoB
I am sorry, but you are poorly informed about the ways in which property, power and fame are transmitted between generations. Sons of 50 acre men have sometimes made it to the Bar, for example, but your chances of putting on that wig are far higher if your Da or uncle had 400 acres and a few broadleaved trees. Pace BW2, this is an ex-colony, and our colonial legacy dies hard.
The processes by which power is passed on are subtle and opaque, because modern western society is highly complex and cybernetic. Different sorts of capital are exchanged among those who possess them by way of various obvious and not-so-obvious circuits. We are a bit like the curate’s egg here. Modern in parts, and some parts smelling a bit rank.
We have elite fee paying schools because we wish to buy social advantage for our children, and enough of us can afford to do so. Pierre Bourdieu has provided all of the empirical sociological evidence that one might require in relation to the role of schooling in social stratification. As Gallileo said, the earth moves, and the dominant are not nearly as deserving, or especially talented, as they like to think.
There is, of course, competition, in the manner which you describe, and I would not wish to question your personal commitment to selecting the most able. There is also something called co-optation, whereby, a ‘suitable in all respects’ person is identified. That is to say, someone who can, in addition to their other qualities, be relied upon to keep their trap shut about the methods which are sued to maintain dominance. Omerta.
If the employment system is as fair as you suggest, it is difficult to see how we could have had such mediocrity and corruption in the world of Irish finance and banking, as well as in the associated professional and political spheres.
For the record, I agree with the rest of your contribution, and with most of your posts.
From France’s friend of the court brief in the Argentina case —
This decision is based on an erroneous understanding
of the meaning of pari passu clauses and contradicts the well-settled mainstream market understanding that pari passu clauses do not covenant
that all payments will be made by a borrower ratably with the borrower’s other unsubordinated debts, but rather that such clauses provide protection against legal subordination of claims.
How did the Irish administrative elite pick up the idea that it was helpless in the face of a pari passu clause to haircut bondholders without a ratable cut to depositors?
“Another form of austerity is losing 47.5% of your deposit in a bank……”
Yes, I saw that. Not sure why some are surprised as the original figure was only ever a first guess. I suppose they could think of the silver lining….. all that valuable equity they are going to get in exchange for it (not). I was reading the Cyprus Mail yesterday and hardly a mention of it….. there’s a heatwave in Athens headlining. ‘Phew what a scorcher’ in more ways than one!
Just saw this on El Pais – Spain has mirrored Ireland in a number of ways during this crisis.
@ PQ: This ai’nt the place. ” Pace BW2, this is an ex-colony, and our colonial legacy dies hard.”
We were never a colony – like never. But old legends never die. We were ourselves, we are ourselves and the only ones we need to ‘blame’ (wrong term, but you know what I mean) for our problems is ourselves. Bit inconvenient that. But there it is. We fix our problems or they stay un-fixed. So far its the latter (mainly, but not always)
Psychologists term the attributing of causal process to others (persons, objects or events) as displacement activity. Not to worry though. It’s rarely fatal – though it is highly infective and easily transmitted from person to person. No known prophylactic. Though daily doses of Bogwater is sometimes recommended (with a tincture of whiskey – you understand!).
As I said; another time. See you around.
There is no simple explanation for the disaster and morality/ amorality and what YoB refers to as mispricing are part of a stew of several ingredients.
In 1997 Maurice O’Connell, Central Bank governor, told an Oireachtas committee that there was a common misconception that the bank had the power to restrict credit. It apparently hadn’t such a power and that was two years before the launch of the euro.
Three years later, O’Connell said:
“Private sector credit is now rising at a rate of 25% year-on-year..residential and commercial property prices have accelerated at an alarming rate. Property prices, as a percentage of disposable income, are now at historically high levels. In the context of the concern about housing costs, there have been calls for restrictions on credit growth. There is no authority to impose restrictions as we might wish. The Central Bank contribution is to ensure that the lending institutions have made good provisions for the rainy day.”
The Government took action, raising stamp duty on buy-to-let investments to 9% and it abolished mortgage interest tax relief for BTL investments.
A year later, house price rises were down from almost 20% in 2000 to 3% in 2001 – coinciding with the dot-com bust in the US.
Irish GDP growth fell from 10.8% in 2000 to 5.3% in 2011; rentals were rising; the builders pressed for a reversal of the BLT measures and there was a general election looming. So there was a complete U-turn and it was open season for the 6 years until the bust.
Empty housing units rose from 140,000 at the time of Census 2002 to 266,000 according to Census 2006 and it was estimated that the number had increased to 350,000 by mid-2008, 17.5% of the housing stock.
As regards elites, in the UK a panel chaired by Alan Milburn, a former cabinet minister, reported in 2009 that privately educated people took the lion’s share of jobs in some professions, despite accounting for only 7% of the population. Three-quarters of judges, 70% of finance directors and 45% of top civil servants went to independent schools, for example. A typical professional born in 1958 came from a family which earned 17% more than the average family income; but by 1970 the family income gap between those who went on to pursue a professional career and the average family had risen to 27% with journalism and accountancy seeing the biggest rise; Lawyers who were born in 1970 grew up in families 64% above the average family’s income and for doctors the figure was 63%; by contrast the teaching, academic and cultural professions saw a decline in numbers who had grown up in families with above average incomes.
A study published in March by the Federal Reserve Bank of San Francisco reports that nearly half, 44%, of American adults who are in the bottom 20% in income were born to parents who were also in the bottom 20%; nearly half, 45%, of adults in the top 20% had parents who were also in the top 20%. Most Americans who were born in the middle 60% had parents who were also born in the middle 60%.
Ireland is likely the same but while social mobility is important, would it have mattered in the second economic disaster in a generation?
Unlikely, as going with the flow usually pays dividends. Black swans are rare.
Lessons were learned by the Swedes and Finns from their recessions in the early 1990s but the Irish Bourbons and nouveau riche had learned nothing and forgotten nothing. It was business as usual.
Bertie Ahern, the chief ringmaster, like his patron Charles Haughey, did not come from elites.
Bertie’s parents were from small farms in West Cork. Bertie and I are third cousins through his late mother, Julia Hourihane!
@Brian Woods Snr
We were never a colony – like never.
That makes the whole plantation thing difficult to credibly explain. Or indeed the history of Ireland and Britain from about 1500 on.
Perhaps I am being too literal here. Perhaps sometimes that small quacking, shinily feathered bird you see waddling towards you is a manifestation of your inability to accept the complex ornithological-historical situation we all find ourselves in rather than a duck.
In a way are we all not omnivorous semi-aquatic flying animals in the Anatidae family?
I hope everyone has learned something profound here today.
@Paul Quigley
Thanks for the post !
As indicated my experience does allow me to interpret the goings on at selections slightly differently than the perceived wisdom of particular professions being closed shops. I do accept that there is a widely held belief and in very particular cases, thankfully very small in my view, hard evidence as you enunciate.
In the main however I’m still skeptical that the inner circle as described in the article is in fact so ultra dominant as the media contends. I accept that the political family/dynasties are indeed a very Irish invention but even in the most recent general election many of these found the going heavy so I’m still on the side that believes the inner circle is in fact a diminishing one, perhaps I’m overly naive.
The educational leg up you mention which many children of wealthy parents enjoy over their less well off student competition is quite an advantage, many educationalists would contend that such a gap is never closed despite best efforts. The structure of our exam based testing system in my view only exacerbates the desire to find and maintain such advantages – there has to be a better way ( I’ve no doubt there is) in testing children/students where such income inequalities can be squeezed out of the system so as to render income levels of students or their parents/guardians statistically irrelevant.
@MH
Untrue
–the answer is very simple . There was a monster property bubble,which when it burst bankrupted the banks–when the banks bust they banrupted the sovereign.
Below is the simple elementary property valuation error that bankrupted the country: http://www.independent.ie/opinion/letters/bubble-values-26826609.html
* ” This was a PLAIN VANILLA PROPERTY BUBBLE, compounded by exceptional concentrations of lending for purposes related to property-and notably commercial property”
*Page 6 ” A preliminiary Report on the Source of Ireland’s Banking Crisis”
by Klaus Regling and Max Watson.
@ PQ: Liked that! As I said, some other thread. Its a tad too ‘adult’ for this site. 😎 Prefer the family micropodidae myself!
Mind you, YoB’s comments on our educational ‘system’ could well be termed ‘economic’. Both Primary and secondary levels might plausibly be classified as ‘unfit for purpose’. And that qualifier in turn depends on who is doing the defining! I’ll skip the third-level as I know a tad too much about it.
We’ll be back!
@ veronica
Cant will be a common currency as the media industry and politicians respond to the opportunities ahead.
Maybe Emily O’Reilly believes that the human rights ideals of 1916 that she sees in the Proclamation were only thwarted by the defeat of Kaiser Wilhelm.
There would have been a secular republic with communities north and south at peace; equal respect for people of religion or none; Nordic standard rights for women; no state hounding of writers; Swedish standard public transparency dating from 1766; Netherlands standard decriminalisation of gay sex dating from 1811 and so on….
It’s amazing how many former colonies, including Ireland, retained laws dating from the hypocritical Victorian period.
As for myth, reality and hypocrisy, it’s hard to beat the man who wrote:
“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”
Thomas Jefferson wrote these lines in the American Declaration of Independence in 1776.
America’s third president said his slaves were subhuman but he fathered up to 6 children with one of them – DNA evidence taken from descendants a decade ago confirmed what some wished to deny.
While he freed his black children, he cruelly condemned almost 200 slaves to the auction block, forever separating families.
As a historian says here, it cannot be rationalised by saying different times.
The legacy of Irish violence since 1916 is not a pretty one. Was that better and the resultant society than what would have followed from the activation of the Home Rule Act after the Great War?
@ John Corcoran
What’s untrue?
It’s a bit more complicated than the soundbite that it was all the fault of surveyors’ valuations.
Everyone else was helpless including dozy regulators.
@MH
You are precisely wrong.
It was a plain vanilla property bubble–which the property professionals/ valuers provided the valuations for.
@Michael Hennigan
The legacy of Irish violence since 1916 is not a pretty one. Was that better and the resultant society than what would have followed from the activation of the Home Rule Act after the Great War?
Counterfactual histories are fraught but anyone arguing that Irish society would have been more progressive had the more reactionary elements of Irish society been politically victorious in preventing independence has a very high “You are kidding me, right?” bar to clear. It is also an implausibly large leap of the imagination to argue that the negative influence of Ireland’s particular variety of Catholic conservatism would have been diminished had we remained part of the UK.
We can however get a little vision of how life might have been as subjects rather than citizens by looking up north where women got the vote in local elections in <coughs>1968. Hardly a ringing advertisement for the liberating qualities of home rule.
As for Ireland’s history of unprovoked violence against others, I think if you compare us with the UK or Europe in the 20th century we do remarkably well.
p.s. Is there a large overlap between people who would prefer that Ireland should still be a part of the UK and those who think that Ireland should remain under Troika administration until we become proper neoliberals?
The only morality tale being played out is the one that demands suffering for our economic sins even if that suffering is counterproductive. Blaming the elite isnt a morality play so much as reasonably directed anger that the suffering hasnt been equally distributed
if x is the correct, pragmatic response to our situation
and y is the response that cleanses us of our sins then punishes us for them
and we choose y over x
then thats a morality tale performed to make the ‘i told ya’ or ‘why cant everything work perfectly’ crowd feel good
@ John Corcoran
Very plain indeed possibly as plain as Myles na gCopaleen’s pint of plain.
Lending as a fraction of GNP increased from 60% in 1997, to over 200% in 2008, twice the level of other industrialized economies, according to Prof Morgan Kelly.
Every domestic bank left banjaxed, the State bust; 50% of SME loans f—ed and so on. Despite Spain’s property boom, its main banks have survived.
Plain maybe for stout, vanilla for ice cream, but the worst property disaster in Europe merits a more credible adjective.
@ Shay Begorrah
To argue that it wasn’t realistic to expect to totally disengage from the then British Empire i.e. inflict a military defeat on the British after a long civil war with unionists, does not imply a rejection of the ultimate aspiration of independence. Times changed and time change.
It took 33 years and misery for thousands of people for a compromise agreement in the North that was first agreed in 1974 to win the support of the extremists on both sides.
As for the Troika and neo liberals, that’s your obsession as seeing reds under the bed is what keeps others engaged.
According to Ronan Fannings new book there was no political solution to the question of Home Rule by the third attempt, so Im not sure what the counterfactual we’re playing with is?
To what extent was Irish society warped by the armed struggle? Not much I would say. A lot of the violence (iirc) was elite on elite any political dvisions resulting from the split in Irish nationalism were surely always there anyway
The north erupting was surely highly contingent on circumstances specific to conditions in Ulster, larger global trends, and political inertia in Westminster, Dublin and Stormont.
And the new state was a considerable success in a lot of ways, taken in the broad context of European politics from 1922-present. A success as well considering the early fate of young states born from violent struggle. I’m not sure what the realistic alternative was?
Imo we are, as always,at the mercy of trends in global politics and path dependance in our political institutions
Trying to maintain a small country of the arse end of Europe isnt a morality play, i think
@ Paul Quigley,
The ever-brilliant Bourdieu was a champion of intellectual honesty and integrity in social analysis, which is why his work will remain highly influential and universally relevant over time.
However, in respect of education, we don’t have the equivalent of the Paris ENS or the English Eton, or Marlborough here by any stretch of the imagination. Yet, one of the possible ‘unintended consequences’ of the policy being pursued by the current Minister for Education in respect of fee-paying schools is that it risks creating a very small number of very high fee-paying institutions that, in time to come, will only be accessible to the offspring of the very rich and privileged in our society, thus replicating the French and the British system of elite institutions as engines to produce and perpetuate existing elite structures in society.
That’s an argument for another day, though. The objections of YoB and others to the NYT article’s description of the pattern of Irish social mobility is that it is just plain wrong.
MH
‘Cant’ is the word for it. Now, if the French fleet anchored off the Irish coast in 1798, at a point where the English garrison in Ireland was seriously depleted, had landed rather than turning back…today we’d all be speaking French as our second language, and equality and fraternity and all the rest of it would have become embedded as the true values of our society over the past 200 years. Do you think? Pity it is, indeed, that we have to live in the world the way it is.
In purely amoral Darwinian terms – the Irish are doing rather well.
The most vibrant Irish genes, by this stage, are almost certainly outside the Island of Ireland – mainly as a result of the ‘property fetish’ which arose at the beginning of the 19th Century with the economic switch from corn to beef due to the rising prosperity in our sister island. IMHO well past time for a little reverse takeover! And well past time for the Irish to cop themselves on with their propensity to punt all on their inherited 19thC ‘property fetish’; 21stC property resides between one’s ears …
@ Veronica: Nicely put, but – “…today we’d all be speaking French as our second language …”
And our first? English, I presume. Or maybe not? Mind boggles at that alternative.
As for the Ministry of Bricks-in-the-Wall. Maybe that’s the cunning plan!
@BW Snr
That’s the great fun thing about counterfactuals, especially the historical variety, isn’t it ? The range of possible outcomes is infinite. A century and a half earlier, the Cromwellian campaign in Ireland had wiped out about one third of the Irish population. So by the time the Franco-British ‘Irish’ 1798 war would have been fought out, just how many of us ‘natives’ would have been left alive to speak any language is debatable. The Irish economy was in tatters then too…
@ veronica et al
Luckily, we have Martyn Turner to provide the real chronicle of our times!
We always seemed to be the victims of bad weather, bad strategy/ tactics or both when it came to help from allies in Europe.
We are still not good at project management!
There is a thread of sadness through Dee Brown’s ‘Bury My Heart at Wounded Knee’ as there was an inevitability that the European’s would prevail. “They made us many promises, more than I can remember, but they never kept but one; they promised to take our land, and they took it,” one chief said.
Had we any real chance? The logistics always left a lot to be desired.
In 1580 Pope Gregory XIII sent 600 Spanish and Italian mercenaries to help the Earl of Desmond but the English snookered them in Ard na Caithne (Smerwick) harbour in Kerry and eventually overwhelmed their fortifications on Dún An Óir, massacring all of them.
The Spanish next arrived in Kinsale and Baltimore while the stronghold of Gaelic Ireland was far to the north.
Besides, the success of O’Neill and O’Donnell was in guerrilla tactics against the likes of the Earl of Essex, not conventional battles.
General Hoche’s arrival in Bantry Bay in December 1796 was another shambolic adventure amidst confusion as to the plan of action.
We were victims but 150 years ago this month, when Irish mobs rioted in New York City in protest against the Union Army draft, blacks were lynched by some of the mob and orphanages were burned.
Why would the French have been more accommodating than the English?
President Jacques Chirac was overheard saying in 2005 about the English that you cannot trust such people whose cuisine is so bad.
“After Finland, it’s the country with the worst food,” he added.
@ veronica
Bourdieu’s views are as you say sound, but they are denied on a daily basis by the institutional leaders of our societies. That is because they are subversive of the social order.
We do not have any ENS because Ireland was a province, not an imperial centre like Paris, or London. Our planter aristocracy sent their children to English public schools to reinforce the apartheid between themselves and the mere Irish, and to secure the order of the Empire. As a German acquaintance once remarked to me, Trinity College is British institution with an Irish address.
The native elite had to grow up in the cracks, so Dublin institutions are generally provincial in nature. Paddy Kavanagh said it all long ago. Big farms of land, and big professional practices. Belfast is also provincial, but that state of affairs is congruent with the political arrangements. I suppose independent Ireland is still a work in progress.
I agree that the NYT article is simplistic and badly argued. The essential message, is, however, correct. Comfortable folk are protecting each other, to the detriment of our state and our society. The necessary enquiries into bubble malpractices will be stymied because some decision-maker’s cousin, lover, neighbour, sporting associate or professional adviser has dirty, negligent, hands.
The ‘why should I take the rap ?’ defence will be an effective one. ‘We can’t touch Mick (Mick, Pat or Sean) because they will finger Trevor, and we need him’. Or we can’t afford to see Trevor’s institution tarnished, because we have a stake in that. Like Chernobyl, the concrete must be poured until the sands of history wash it all away.
The hope is that Joe Public will get bored it if it’s dragged out long enough. In the meantime, the mediocracy and the world of nod and wink continues. As you were boys. No wonder the young are disillusioned. When the chips were down, the ‘seniors’ hadn’t got it.
@PQ
Democracy is always a work in progress.
All,
Many thanks for illuminating comments and interesting links. It’s now clear to me, thanks to MH, that the ‘luck of the Irish’ has always been a myth; and that the blubbering (about our woes, which are always someone else’s fault) and blathering (about the ‘best small country in the world to …’ etc.) and irony-free balderdash emanating from the great and the good can be anticipated to increase exponentially as the 1916 centenary approaches. Or maybe not – there’s has to be a bottom line to the level of farce into which our public and political discourse can descend or the cargo-cult approach to our economic salvation be tolerated.
@ PQ: Paul, I wonder are you crediting our Vunderkinds with a tad more intelligence than they actually possess? Do you observe any Chess Masters in our throng? Or are they merely middle-of-the-road meritocrats? My experiences lead me to the latter opinion. The stakes are too small.
@ Veronica: ” [there] has to be a bottom line to the level of farce into which our public and political discourse can descend or the cargo-cult approach to our economic salvation be tolerated.”
Bottom line? I wish you luck on that one. Just when you think ….
@Veronica
You in good form these days – Blind Biddy extends an invitation to afternoon tea and chat ..
@DoD
BB ‘afternoon tea and chat’? Ah no, I’ll pass, thanks all the same. ‘She’ might eat me!
Nay Nay – a gentle soul; simply radicalized by the lunacy of the ‘greatest bank heist in history’ and Ministers pilfering her disability allowances to finance same.
Tara French Says:
“Our ruling class — including many of the politicians, bankers and property developers who wrecked the economy — is a tiny community, interwoven by friendship, marriages, education, sports and financial transactions to a degree that would be unimaginable in a bigger country. That interweaving has created a safety net that won’t let any of the ruling elite fall.”
She makes no specific mention of the accessories who allowed the main players to wreck the economy-IBEC Leaders, ICTU Leaders (who were represented on board of Central Bank), Professors at the ESRI (apostles of the soft landing), Business Academics, Financial Journalists, Newspaper proprietors with their property supplements, opposition politicians who demanded even more extreme free market policies etc, etc
Tara is right when she says that all the elites were interlinke in a tiny society.
51 replies on “Writers on the Irish Crisis”
The powerful and elite having a disconnect between their actions and the consequences of those actions? This has been going on for centuries, all over the world. It is not just applicable to the recent Irish situation and subsequent austerity.
“Enter the Legends of the Fall contest run by the Irish Times”
€400 for 1500-3000 words? Now that’s austerity!
p.s. one of the benefits of working in PR is that you get to eat in some great places. Last night I ate in a new place set up in Cadaqués ((NE Spain, on the coast/Costa Brava) by 3 ex-elBulli chefs. Amazing food and amazing value. Get there before they get their M* stars.
http://en.compartircadaques.com/
Long live austerity.
Thanks for that, Marie Antoinette. Here’s hoping you meet a similar fate.
@PR Guy
Another form of austerity is losing 47.5% of your deposit in a bank……
http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_28/07/2013_511601
@Ernie Ball
“Thanks for that, Marie Antoinette. Here’s hoping you meet a similar fate.”
What? Having a champagne glass made in the shape of my chest? 🙂
Would you settle for a broken one buried in it?
Am I alone in beginning to find simplistic representations of the Irish property ‘bubble and crash’ just a little bit tiresome? Here again we have another twist on the narrative of Ireland’s crash, this time as a pseudo- morality play, in which ‘angels’ (the masses) were duped by ‘demons’ (the bankers and their fellow-travellers in the cosy elites who have laid claim to all our resources for their own benefit in perpetuity).
Sure, the Anglo boys were twerps. The tapes provide ample confirmation of that, and of their panic and desperation as the reality began to dawn on them that their particular ‘party’ was drawing to a close. But a brief check on their backgrounds might have revealed that they hailed from the ‘wrong side of the tracks’, so to speak, in respect of the traditional lineage of the Irish banking elite.
I was initially confused too by the author’s portrait of Irish society. I don’t recognise it and initially assumed that the society being described was New York’s upper echelons, or some other alien place.
Perhaps I’ve been leading too sheltered an existence for the past 57 years, though I don’t think so. I seem to recall having lived through an extraordinary socio-economic change since the early 1970s that has transformed this state from a society of relatively impoverished small farmers, with a few underdeveloped urban enclaves, into a relatively typical European society. To be sure, Ireland suffers from ‘small country syndrome’, as the political scientists term it. So the trend towards a consensus mindset on whatever is the latest fantasy that generally takes hold, and intolerance of any dissenting voices, which this syndrome engenders, did us no favours as we primed the property bubble. It does us no favours, either, as it bubbles away in respect of a wide range of social and economic issues temporarily driven below the parapet by the current crisis. Finally, ‘scepticism’ is a more appropriate label than ‘cynicism’ to attribute to the average Irish person’s response to the witterings of authority, political or otherwise. Maybe there were some among us who temporarily lost that national character trait; but even that is debatable.
This crisis, and how it plays out in Irish society, is more nuanced and complex and multi-layered than any ‘four legs good, two legs bad’ narrative can allow for. In the end, such narrative approaches are as self-delusional as the ‘we’re rich’ delusions of the bubble years, and no help at all.
@ PR Guy
Enjoy the champagne! I’m sure you’ve worked hard enough for it.
Only one small part of the overall Tiger days but this news story has always struck me as problematic for the “elite” narrative and consistent with Veronica’s point about the backgrounds of the bankers.
Veronica
The economy is always a morality play though
at least according to the second link here
http://www.marionfourcade.org/publications/selected-articles/
One thing the NY times piece points out very correctly is the essential amorality of the Irish Ascendancy. However, he wrongly concludes that this was caused by a disconnect between action and consequence. In reality, the lack of consequence above all is the cause of amorality in Irish public life.
Here’s a hypothetical: Suppose there were roving gangs of pensioners, up in arms over their 0.6% levy, brandishing meat cleaver and prowling the streets for bankers. In such a situation, would AIB have been so quick to put €1.1 billion of their public bailout money directly into their own personal pension fund? I think not.
Consequence. Consequence is the only true restraint that can tame the criminal spirit. This applies as well to pickpockets as bankers. David Drumm and Sean Fitzpatrick laughed — laugh — because there were no consequences for them. So too did the bribing developers and bribed councillers of Dublin as they torpedoed rational city planning for profit. They are all amoral because amorality and crime pay in Ireland, and in the absence of a competent legal system, bad behaviour will continue to drive out good.
I find French’s argument unpersuasive as it relys on the notion that “we all wen’t mad”. That we all bought into the housing boom. An easy mistake for some in the Dublin “scene” to make. In fact, most of us did not party. We did not approve of the housing madness and we did not take part. Yet we are now the ones expected to pay, while amoral criminals escape without consequence.
I also find the notion that the Irish elite are somehow “trapped” in pre-ordained lives to be nothing short of offensive. These people chose their lives. They chose to be criminals, to defraud and extort money from the rest of society. The executives and directors of Anglo, AIB, BoI, PTSB, and Nationwide chose to make their institutions insolvent, just as the Irish Government and civil service chose to raid public money to bailing out the same.
It is the rest of us who have been trapped in a preordained penury, destined since at least 2000 to pay the debts of those who stoked the boom. We haven’t been betrayed, we’ve been exploited.
@ veronica
You are not alone! There is an “elite” in Ireland but, as in any Western democracy, it is a very big tent i.e. rent seekers of every description who were, and many of whom still are, taking more of the national cake than their contribution deserves.
No doubt, there is a great artistic work somewhere, or in gestation, which will pull together not just a consensus but some penetrating insight which will sum up the era. This Tana French contribution is not it.
Maybe Donal Ryan has written it!
@ All
Meanwhile!
http://www.independent.ie/business/taoiseach-says-no-let-up-in-budget-2014-29454738.html
Rather than the narrative of a desperately poor people suddenly becoming rich, a system of limited accountability, with a poor standard of public representation, the political muzzling of civil service policymakers to avoid any hint of dissent, ministers incapable of making decisions without the crutch of external reports from conflicted commercial interests, coupled with a weak media, was a recipe for trouble.
The continuing lack of interest in reforming outdated systems benefits elites but reflects a common attitude.
A tribunal sits for a decade and a half on planning corruption, through boom and bust, and the system that makes land scarce in a country that has a low level of urbanisation, remains untouchable. Lawyers become multimillionaires from the process and the few related court cases collapse.
IBRC, the successor to Anglo was only shut down as part of an EU deal and it had most of the pre-bust managers still in place. 7 senior executives had pay packages worth more than €500,000 – – running an entity responsible for debt collection and legal functions.
Figures issued to Fianna Fáil TD Michael McGrath in response to a Dáil question last November showed that there were 12 staff at IBRC in receipt of remuneration packages of €300,000-€399,000, 24 on €200,000-€299,000 and 44 on €150,000- €199,000. The packages included salaries, pensions benefits and allowances. Some 146 IBRC staff earned €100,000-€149,000, while 774 earned less than €100,000.
It’s well to remember that the real economy was slowing before the property market was let rip.
The real economy peaked with the dot.com boom and Patrick Honohan has pointed out that “banks had not been central to the financing of the export-led Celtic Tiger period of the Irish Economy which ended about 2000..From 2003 the banks leveraged their local resources with enormous borrowings from abroad (easily available due to the global savings glut, and also to the lack of exchange rate risk for euro borrowing). At the end of 2003, net indebtedness of Irish banks to the rest of the world was just 10% of GDP. By early 2008 that had jumped to over 60%.”
Another striking statistic was that less than €200m was available annually for venture capital investment in Irish business, while the windfalls of the property boom were going into overseas investment coupled with bank credit, making the Irish second to the Germans as Europe’s top investors in commercial property.
“The republic that was created from the ashes of the rising was a perversion of the human rights ideals of 1916,” the outgoing Ombudsman and Information Commissioner Emily O’Reilly said Sunday at the MacGill summer school.
http://www.irishtimes.com/news/social-affairs/ombudsman-emily-o-reilly-says-current-republic-a-perversion-of-1916-ideals-1.1477902
Maybe.
She cited Peter Sutherland in her speech — who also was a beneficiary of the republic of patronage!
MH
What ‘human rights ideals’ is the lady referring to? 1916 was not about a struggle for ‘human rights’ by any stretch of retrospective construction or historical revisionism. Still, reports of her speech suggest it was far more realistic in its appraisal of what’s going wrong in our society than ‘the best little country to live in’ trope of the Taoiseach’s address. Time to start looking out for travel deals for 2016, I think – in the interests of sanity, six months abroad might be advised.
@ Veronica and Michael Hennigan
The following sentence leapt out of this Independent report.
‘”Anglo tapes were shocking,” says Aynsley’
… “He said some politicians seemed to object to the bank’s efforts to force some borrower [sic] to repay loans.” …
Er, which politicians objected, in what way, to IBRC attempting to get whose loans repaid?
In the long run, the value of an asset must be linked to the income that can be generated from it (rent in the case of a property,dividends in the case of shares). It is quite possible for individual assets to shoot up in price since residential areas can become more fashionable and companies can have very successful products. But in aggregrate, share and property prices are constrained by the growth rate of the economy, which in turn depends on the stock of productive capital(new factories etc etc). Rents cannot rise faster than incomes for long before no one can afford to rent. On the same basis, if house prices outstrip GDP, more and more of a homebuyer’s income must go to service the mortgage. This cannot last.
At the peak BTL properties were been valued at 1% yields.
Below is the link to the elementary property valuation error that bankrupted Ireland;
http://www.irishexaminer.com/opinion/letters/a-question-of-valuation-220487.html
Tana French’s article is a an extremely facile description of Ireland and the Irish crisis. It represents the hallmarks of a 1st year sociology student asked to write a 1,000 words on a Marxist interpretation of the financial crisis in Ireland.
The article can be summed up pretty easily.
The Elite run Ireland. Ireland is a small country. A small cabal of Elite people who play golf created a society where people felt there were no consequences to their actions. The middle classes in Ireland were unwoken victims who were led by this elite and equally began too feel that their actions were without consequence.
Solution: Revolution
@Veronica
“..Am I alone in beginning to find simplistic representations of the Irish property ‘bubble and crash’ just a little bit tiresome? Here again we have another twist on the narrative of Ireland’s crash, this time as a pseudo- morality play, in which ‘angels’ (the masses) were duped by ‘demons’ (the bankers and their fellow-travellers in the cosy elites who have laid claim to all our resources for their own benefit in perpetuity)..”
It’s not so much that the angels were ‘duped’ but as I’ve suggested here countless times it was the lack of understanding of the effect of bank money supply creation, markets and price what ultimately has us all in an economic tizzy.
It was this lack of understanding which ultimately drove the credit creation bus. This daft notion that excess savings simply had to find a home and Ireland Inc. was a perfect fit is frankly nonsensical because had the bankers understood what was actually going on with regards to the underlying pricing in the market they would have called halt long before the ‘crash’ came. No amount of excess savings in the system could make property deals yielding less than 1% ever make sense.
It was the lack of understanding, greed and failure to adhere to consumer codes on the behalf of the bankers which was the undoing of us. That is not to say that all those working in banks at the time bought into this notion of ‘utopia’ as is described. Legions of bank employees had severe difficulties with what was going on but like most organizations the time and ability to have ones voice heard is often dulled and smothered by bonuses and ongoing job security and the like.
So you may find it ‘tiresome’ that the debate continues but sadly it has to, because the root of the problem has yet to be dealt with and that lies in the fact that the property market was simply allowed to get out of control by those who ought to have known better. Like it or loathe it the average Joe consumer cannot afford to buy goods which have been mis priced. All the recent eveidence is pointing in that direction.
Equally the representation in the article with regard to the lost hope bit is a bit nauseating I’ll grant you that, however there is a reference to the less than qualified associates of the so called elites being able to slip up the professional pole, because that’s the way it is, sort of thing. I disagree with that analysis.
I have worked in many organizations including some of the country’s and world’s biggest and have been involved in many if not countless employment drives and I can honestly say that in all that time I was never involved in any interview process or otherwise where favouritism could ever have been proven, shown, implied and certainly not exercised with regards to any position. Never.
So I absolutely dispute what’s suggested in the article and particularly the implication that this process is somehow endemic. Wrong. So the following as stated I believe is complete nonsense insofar as my experience testifies.
“…If you’re a banker and your golf buddy’s kid wants to be a banker, then it doesn’t matter if the kid is an idiot, or if he kills cats for kicks: you’ll take him on, and you’ll keep him on..”
Don’t get me wrong – many that came through the bank doors whilst proclaiming to be best qualified, soon found that the allure of money had the effect of quelling their best asset namely their brains.
@ YoB
Great post! Your arguments are persuasive, obviously made on the basis of experience, and a helpful contribution towards understanding how things work in certain elite circles. I would also agree with many other points made by posters who have critiqued this article. Just one thing: my own problem is not with having a robust discussion about what went wrong in our society – the amoral business culture, regulatory failure, political hubris and negligence, the inevitability of the ‘bust’ etc, – on which debate and inquiry must go on, hopefully in parallel with a grown-up discussion about ‘what sort of society we want to have when we get out of this’ and what actions/ infrastructure/ reforms etc. must we contemplate in order to ensure we have some chance of achieving that state? My irritation springs from flawed analysis which is based on either willful ignorance, or deliberate hijacking of the narrative to a simplistic ‘angels and demons’ paradigm that inevitably requires shoehorning facts to fit the chosen theory.
@John Kennedy
I hope you’re wrong!
following Beckett:
..
@ YoB
I am sorry, but you are poorly informed about the ways in which property, power and fame are transmitted between generations. Sons of 50 acre men have sometimes made it to the Bar, for example, but your chances of putting on that wig are far higher if your Da or uncle had 400 acres and a few broadleaved trees. Pace BW2, this is an ex-colony, and our colonial legacy dies hard.
The processes by which power is passed on are subtle and opaque, because modern western society is highly complex and cybernetic. Different sorts of capital are exchanged among those who possess them by way of various obvious and not-so-obvious circuits. We are a bit like the curate’s egg here. Modern in parts, and some parts smelling a bit rank.
We have elite fee paying schools because we wish to buy social advantage for our children, and enough of us can afford to do so. Pierre Bourdieu has provided all of the empirical sociological evidence that one might require in relation to the role of schooling in social stratification. As Gallileo said, the earth moves, and the dominant are not nearly as deserving, or especially talented, as they like to think.
http://www.lrb.co.uk/v19/n09/geoffrey-hawthorn/top-of-the-class
There is, of course, competition, in the manner which you describe, and I would not wish to question your personal commitment to selecting the most able. There is also something called co-optation, whereby, a ‘suitable in all respects’ person is identified. That is to say, someone who can, in addition to their other qualities, be relied upon to keep their trap shut about the methods which are sued to maintain dominance. Omerta.
If the employment system is as fair as you suggest, it is difficult to see how we could have had such mediocrity and corruption in the world of Irish finance and banking, as well as in the associated professional and political spheres.
For the record, I agree with the rest of your contribution, and with most of your posts.
From France’s friend of the court brief in the Argentina case —
This decision is based on an erroneous understanding
of the meaning of pari passu clauses and contradicts the well-settled mainstream market understanding that pari passu clauses do not covenant
that all payments will be made by a borrower ratably with the borrower’s other unsubordinated debts, but rather that such clauses provide protection against legal subordination of claims.
How did the Irish administrative elite pick up the idea that it was helpless in the face of a pari passu clause to haircut bondholders without a ratable cut to depositors?
http://www.shearman.com/files/upload/NML_2013.07.26_-_France_Amicus_Brief.pdf
@Ernie Ball
“Would you settle for a broken one buried in it?”
Lighten up fella.
@Fiatluxjnr
“Another form of austerity is losing 47.5% of your deposit in a bank……”
Yes, I saw that. Not sure why some are surprised as the original figure was only ever a first guess. I suppose they could think of the silver lining….. all that valuable equity they are going to get in exchange for it (not). I was reading the Cyprus Mail yesterday and hardly a mention of it….. there’s a heatwave in Athens headlining. ‘Phew what a scorcher’ in more ways than one!
Just saw this on El Pais – Spain has mirrored Ireland in a number of ways during this crisis.
http://elpais.com/elpais/2013/07/29/inenglish/1375114854_876740.html
@ PQ: This ai’nt the place. ” Pace BW2, this is an ex-colony, and our colonial legacy dies hard.”
We were never a colony – like never. But old legends never die. We were ourselves, we are ourselves and the only ones we need to ‘blame’ (wrong term, but you know what I mean) for our problems is ourselves. Bit inconvenient that. But there it is. We fix our problems or they stay un-fixed. So far its the latter (mainly, but not always)
Psychologists term the attributing of causal process to others (persons, objects or events) as displacement activity. Not to worry though. It’s rarely fatal – though it is highly infective and easily transmitted from person to person. No known prophylactic. Though daily doses of Bogwater is sometimes recommended (with a tincture of whiskey – you understand!).
As I said; another time. See you around.
There is no simple explanation for the disaster and morality/ amorality and what YoB refers to as mispricing are part of a stew of several ingredients.
In 1997 Maurice O’Connell, Central Bank governor, told an Oireachtas committee that there was a common misconception that the bank had the power to restrict credit. It apparently hadn’t such a power and that was two years before the launch of the euro.
Three years later, O’Connell said:
The Government took action, raising stamp duty on buy-to-let investments to 9% and it abolished mortgage interest tax relief for BTL investments.
A year later, house price rises were down from almost 20% in 2000 to 3% in 2001 – coinciding with the dot-com bust in the US.
Irish GDP growth fell from 10.8% in 2000 to 5.3% in 2011; rentals were rising; the builders pressed for a reversal of the BLT measures and there was a general election looming. So there was a complete U-turn and it was open season for the 6 years until the bust.
Empty housing units rose from 140,000 at the time of Census 2002 to 266,000 according to Census 2006 and it was estimated that the number had increased to 350,000 by mid-2008, 17.5% of the housing stock.
As regards elites, in the UK a panel chaired by Alan Milburn, a former cabinet minister, reported in 2009 that privately educated people took the lion’s share of jobs in some professions, despite accounting for only 7% of the population. Three-quarters of judges, 70% of finance directors and 45% of top civil servants went to independent schools, for example. A typical professional born in 1958 came from a family which earned 17% more than the average family income; but by 1970 the family income gap between those who went on to pursue a professional career and the average family had risen to 27% with journalism and accountancy seeing the biggest rise; Lawyers who were born in 1970 grew up in families 64% above the average family’s income and for doctors the figure was 63%; by contrast the teaching, academic and cultural professions saw a decline in numbers who had grown up in families with above average incomes.
A study published in March by the Federal Reserve Bank of San Francisco reports that nearly half, 44%, of American adults who are in the bottom 20% in income were born to parents who were also in the bottom 20%; nearly half, 45%, of adults in the top 20% had parents who were also in the top 20%. Most Americans who were born in the middle 60% had parents who were also born in the middle 60%.
Ireland is likely the same but while social mobility is important, would it have mattered in the second economic disaster in a generation?
Unlikely, as going with the flow usually pays dividends. Black swans are rare.
Lessons were learned by the Swedes and Finns from their recessions in the early 1990s but the Irish Bourbons and nouveau riche had learned nothing and forgotten nothing. It was business as usual.
Bertie Ahern, the chief ringmaster, like his patron Charles Haughey, did not come from elites.
Bertie’s parents were from small farms in West Cork. Bertie and I are third cousins through his late mother, Julia Hourihane!
@Brian Woods Snr
That makes the whole plantation thing difficult to credibly explain. Or indeed the history of Ireland and Britain from about 1500 on.
Perhaps I am being too literal here. Perhaps sometimes that small quacking, shinily feathered bird you see waddling towards you is a manifestation of your inability to accept the complex ornithological-historical situation we all find ourselves in rather than a duck.
In a way are we all not omnivorous semi-aquatic flying animals in the Anatidae family?
I hope everyone has learned something profound here today.
@Paul Quigley
Thanks for the post !
As indicated my experience does allow me to interpret the goings on at selections slightly differently than the perceived wisdom of particular professions being closed shops. I do accept that there is a widely held belief and in very particular cases, thankfully very small in my view, hard evidence as you enunciate.
In the main however I’m still skeptical that the inner circle as described in the article is in fact so ultra dominant as the media contends. I accept that the political family/dynasties are indeed a very Irish invention but even in the most recent general election many of these found the going heavy so I’m still on the side that believes the inner circle is in fact a diminishing one, perhaps I’m overly naive.
The educational leg up you mention which many children of wealthy parents enjoy over their less well off student competition is quite an advantage, many educationalists would contend that such a gap is never closed despite best efforts. The structure of our exam based testing system in my view only exacerbates the desire to find and maintain such advantages – there has to be a better way ( I’ve no doubt there is) in testing children/students where such income inequalities can be squeezed out of the system so as to render income levels of students or their parents/guardians statistically irrelevant.
@MH
Untrue
–the answer is very simple . There was a monster property bubble,which when it burst bankrupted the banks–when the banks bust they banrupted the sovereign.
Below is the simple elementary property valuation error that bankrupted the country:
http://www.independent.ie/opinion/letters/bubble-values-26826609.html
* ” This was a PLAIN VANILLA PROPERTY BUBBLE, compounded by exceptional concentrations of lending for purposes related to property-and notably commercial property”
*Page 6 ” A preliminiary Report on the Source of Ireland’s Banking Crisis”
by Klaus Regling and Max Watson.
@ PQ: Liked that! As I said, some other thread. Its a tad too ‘adult’ for this site. 😎 Prefer the family micropodidae myself!
Mind you, YoB’s comments on our educational ‘system’ could well be termed ‘economic’. Both Primary and secondary levels might plausibly be classified as ‘unfit for purpose’. And that qualifier in turn depends on who is doing the defining! I’ll skip the third-level as I know a tad too much about it.
We’ll be back!
@ veronica
Cant will be a common currency as the media industry and politicians respond to the opportunities ahead.
Maybe Emily O’Reilly believes that the human rights ideals of 1916 that she sees in the Proclamation were only thwarted by the defeat of Kaiser Wilhelm.
There would have been a secular republic with communities north and south at peace; equal respect for people of religion or none; Nordic standard rights for women; no state hounding of writers; Swedish standard public transparency dating from 1766; Netherlands standard decriminalisation of gay sex dating from 1811 and so on….
It’s amazing how many former colonies, including Ireland, retained laws dating from the hypocritical Victorian period.
As for myth, reality and hypocrisy, it’s hard to beat the man who wrote:
Thomas Jefferson wrote these lines in the American Declaration of Independence in 1776.
America’s third president said his slaves were subhuman but he fathered up to 6 children with one of them – DNA evidence taken from descendants a decade ago confirmed what some wished to deny.
While he freed his black children, he cruelly condemned almost 200 slaves to the auction block, forever separating families.
As a historian says here, it cannot be rationalised by saying different times.
http://www.nytimes.com/2012/12/01/opinion/the-real-thomas-jefferson.html?_r=0
The legacy of Irish violence since 1916 is not a pretty one. Was that better and the resultant society than what would have followed from the activation of the Home Rule Act after the Great War?
@ John Corcoran
What’s untrue?
It’s a bit more complicated than the soundbite that it was all the fault of surveyors’ valuations.
Everyone else was helpless including dozy regulators.
@MH
You are precisely wrong.
It was a plain vanilla property bubble–which the property professionals/ valuers provided the valuations for.
@Michael Hennigan
Counterfactual histories are fraught but anyone arguing that Irish society would have been more progressive had the more reactionary elements of Irish society been politically victorious in preventing independence has a very high “You are kidding me, right?” bar to clear. It is also an implausibly large leap of the imagination to argue that the negative influence of Ireland’s particular variety of Catholic conservatism would have been diminished had we remained part of the UK.
We can however get a little vision of how life might have been as subjects rather than citizens by looking up north where women got the vote in local elections in <coughs>1968. Hardly a ringing advertisement for the liberating qualities of home rule.
As for Ireland’s history of unprovoked violence against others, I think if you compare us with the UK or Europe in the 20th century we do remarkably well.
p.s. Is there a large overlap between people who would prefer that Ireland should still be a part of the UK and those who think that Ireland should remain under Troika administration until we become proper neoliberals?
The only morality tale being played out is the one that demands suffering for our economic sins even if that suffering is counterproductive. Blaming the elite isnt a morality play so much as reasonably directed anger that the suffering hasnt been equally distributed
if x is the correct, pragmatic response to our situation
and y is the response that cleanses us of our sins then punishes us for them
and we choose y over x
then thats a morality tale performed to make the ‘i told ya’ or ‘why cant everything work perfectly’ crowd feel good
@ John Corcoran
Very plain indeed possibly as plain as Myles na gCopaleen’s pint of plain.
Lending as a fraction of GNP increased from 60% in 1997, to over 200% in 2008, twice the level of other industrialized economies, according to Prof Morgan Kelly.
Every domestic bank left banjaxed, the State bust; 50% of SME loans f—ed and so on. Despite Spain’s property boom, its main banks have survived.
Plain maybe for stout, vanilla for ice cream, but the worst property disaster in Europe merits a more credible adjective.
@ Shay Begorrah
To argue that it wasn’t realistic to expect to totally disengage from the then British Empire i.e. inflict a military defeat on the British after a long civil war with unionists, does not imply a rejection of the ultimate aspiration of independence. Times changed and time change.
It took 33 years and misery for thousands of people for a compromise agreement in the North that was first agreed in 1974 to win the support of the extremists on both sides.
As for the Troika and neo liberals, that’s your obsession as seeing reds under the bed is what keeps others engaged.
According to Ronan Fannings new book there was no political solution to the question of Home Rule by the third attempt, so Im not sure what the counterfactual we’re playing with is?
To what extent was Irish society warped by the armed struggle? Not much I would say. A lot of the violence (iirc) was elite on elite any political dvisions resulting from the split in Irish nationalism were surely always there anyway
The north erupting was surely highly contingent on circumstances specific to conditions in Ulster, larger global trends, and political inertia in Westminster, Dublin and Stormont.
And the new state was a considerable success in a lot of ways, taken in the broad context of European politics from 1922-present. A success as well considering the early fate of young states born from violent struggle. I’m not sure what the realistic alternative was?
Imo we are, as always,at the mercy of trends in global politics and path dependance in our political institutions
Trying to maintain a small country of the arse end of Europe isnt a morality play, i think
@ Paul Quigley,
The ever-brilliant Bourdieu was a champion of intellectual honesty and integrity in social analysis, which is why his work will remain highly influential and universally relevant over time.
However, in respect of education, we don’t have the equivalent of the Paris ENS or the English Eton, or Marlborough here by any stretch of the imagination. Yet, one of the possible ‘unintended consequences’ of the policy being pursued by the current Minister for Education in respect of fee-paying schools is that it risks creating a very small number of very high fee-paying institutions that, in time to come, will only be accessible to the offspring of the very rich and privileged in our society, thus replicating the French and the British system of elite institutions as engines to produce and perpetuate existing elite structures in society.
That’s an argument for another day, though. The objections of YoB and others to the NYT article’s description of the pattern of Irish social mobility is that it is just plain wrong.
MH
‘Cant’ is the word for it. Now, if the French fleet anchored off the Irish coast in 1798, at a point where the English garrison in Ireland was seriously depleted, had landed rather than turning back…today we’d all be speaking French as our second language, and equality and fraternity and all the rest of it would have become embedded as the true values of our society over the past 200 years. Do you think? Pity it is, indeed, that we have to live in the world the way it is.
In purely amoral Darwinian terms – the Irish are doing rather well.
The most vibrant Irish genes, by this stage, are almost certainly outside the Island of Ireland – mainly as a result of the ‘property fetish’ which arose at the beginning of the 19th Century with the economic switch from corn to beef due to the rising prosperity in our sister island. IMHO well past time for a little reverse takeover! And well past time for the Irish to cop themselves on with their propensity to punt all on their inherited 19thC ‘property fetish’; 21stC property resides between one’s ears …
@ Veronica: Nicely put, but – “…today we’d all be speaking French as our second language …”
And our first? English, I presume. Or maybe not? Mind boggles at that alternative.
As for the Ministry of Bricks-in-the-Wall. Maybe that’s the cunning plan!
@BW Snr
That’s the great fun thing about counterfactuals, especially the historical variety, isn’t it ? The range of possible outcomes is infinite. A century and a half earlier, the Cromwellian campaign in Ireland had wiped out about one third of the Irish population. So by the time the Franco-British ‘Irish’ 1798 war would have been fought out, just how many of us ‘natives’ would have been left alive to speak any language is debatable. The Irish economy was in tatters then too…
@ veronica et al
Luckily, we have Martyn Turner to provide the real chronicle of our times!
http://www.irishtimes.com/debate/martyn-turner-1.1479735
@ veronica
We always seemed to be the victims of bad weather, bad strategy/ tactics or both when it came to help from allies in Europe.
We are still not good at project management!
There is a thread of sadness through Dee Brown’s ‘Bury My Heart at Wounded Knee’ as there was an inevitability that the European’s would prevail. “They made us many promises, more than I can remember, but they never kept but one; they promised to take our land, and they took it,” one chief said.
Had we any real chance? The logistics always left a lot to be desired.
In 1580 Pope Gregory XIII sent 600 Spanish and Italian mercenaries to help the Earl of Desmond but the English snookered them in Ard na Caithne (Smerwick) harbour in Kerry and eventually overwhelmed their fortifications on Dún An Óir, massacring all of them.
The Spanish next arrived in Kinsale and Baltimore while the stronghold of Gaelic Ireland was far to the north.
Besides, the success of O’Neill and O’Donnell was in guerrilla tactics against the likes of the Earl of Essex, not conventional battles.
General Hoche’s arrival in Bantry Bay in December 1796 was another shambolic adventure amidst confusion as to the plan of action.
We were victims but 150 years ago this month, when Irish mobs rioted in New York City in protest against the Union Army draft, blacks were lynched by some of the mob and orphanages were burned.
http://www.finfacts.ie/irishfinancenews/article_1026327.shtml
Why would the French have been more accommodating than the English?
President Jacques Chirac was overheard saying in 2005 about the English that you cannot trust such people whose cuisine is so bad.
“After Finland, it’s the country with the worst food,” he added.
@ veronica
Bourdieu’s views are as you say sound, but they are denied on a daily basis by the institutional leaders of our societies. That is because they are subversive of the social order.
We do not have any ENS because Ireland was a province, not an imperial centre like Paris, or London. Our planter aristocracy sent their children to English public schools to reinforce the apartheid between themselves and the mere Irish, and to secure the order of the Empire. As a German acquaintance once remarked to me, Trinity College is British institution with an Irish address.
The native elite had to grow up in the cracks, so Dublin institutions are generally provincial in nature. Paddy Kavanagh said it all long ago. Big farms of land, and big professional practices. Belfast is also provincial, but that state of affairs is congruent with the political arrangements. I suppose independent Ireland is still a work in progress.
I agree that the NYT article is simplistic and badly argued. The essential message, is, however, correct. Comfortable folk are protecting each other, to the detriment of our state and our society. The necessary enquiries into bubble malpractices will be stymied because some decision-maker’s cousin, lover, neighbour, sporting associate or professional adviser has dirty, negligent, hands.
The ‘why should I take the rap ?’ defence will be an effective one. ‘We can’t touch Mick (Mick, Pat or Sean) because they will finger Trevor, and we need him’. Or we can’t afford to see Trevor’s institution tarnished, because we have a stake in that. Like Chernobyl, the concrete must be poured until the sands of history wash it all away.
The hope is that Joe Public will get bored it if it’s dragged out long enough. In the meantime, the mediocracy and the world of nod and wink continues. As you were boys. No wonder the young are disillusioned. When the chips were down, the ‘seniors’ hadn’t got it.
@PQ
Democracy is always a work in progress.
All,
Many thanks for illuminating comments and interesting links. It’s now clear to me, thanks to MH, that the ‘luck of the Irish’ has always been a myth; and that the blubbering (about our woes, which are always someone else’s fault) and blathering (about the ‘best small country in the world to …’ etc.) and irony-free balderdash emanating from the great and the good can be anticipated to increase exponentially as the 1916 centenary approaches. Or maybe not – there’s has to be a bottom line to the level of farce into which our public and political discourse can descend or the cargo-cult approach to our economic salvation be tolerated.
@ PQ: Paul, I wonder are you crediting our Vunderkinds with a tad more intelligence than they actually possess? Do you observe any Chess Masters in our throng? Or are they merely middle-of-the-road meritocrats? My experiences lead me to the latter opinion. The stakes are too small.
@ Veronica: ” [there] has to be a bottom line to the level of farce into which our public and political discourse can descend or the cargo-cult approach to our economic salvation be tolerated.”
Bottom line? I wish you luck on that one. Just when you think ….
@Veronica
You in good form these days – Blind Biddy extends an invitation to afternoon tea and chat ..
@DoD
BB ‘afternoon tea and chat’? Ah no, I’ll pass, thanks all the same. ‘She’ might eat me!
Nay Nay – a gentle soul; simply radicalized by the lunacy of the ‘greatest bank heist in history’ and Ministers pilfering her disability allowances to finance same.
Tara French Says:
“Our ruling class — including many of the politicians, bankers and property developers who wrecked the economy — is a tiny community, interwoven by friendship, marriages, education, sports and financial transactions to a degree that would be unimaginable in a bigger country. That interweaving has created a safety net that won’t let any of the ruling elite fall.”
She makes no specific mention of the accessories who allowed the main players to wreck the economy-IBEC Leaders, ICTU Leaders (who were represented on board of Central Bank), Professors at the ESRI (apostles of the soft landing), Business Academics, Financial Journalists, Newspaper proprietors with their property supplements, opposition politicians who demanded even more extreme free market policies etc, etc
Tara is right when she says that all the elites were interlinke in a tiny society.