Tana French’s opinion piece on the “Psychology of the Irish Meltdown“, published recently in both the New York Times and the Sunday Independent, presents an account of our recent history in which the fortunes of the entire nation have been determined by a small group of apparently powerful people. It is an analysis ofï¿½the Irish people, their government and the Irish State that is deeply flawed, and this is my response to it.
Since late 2008, when our economic reversal of fortune began, numerous commentators have attempted to distil our experience into a perfectly linear chain of events. The plot outline rarely deviates: the plucky, hard-working Irish, who cobbled together an economic miracle through sweat, toil and sacrifice, were robbed blind by banks, politicians, the EU, the ECB, the IMF and any other faceless bureaucracy in which people wear suits and earn six figure salaries.
While this analysis finds a ready audience amongst people who have experienced a fall in their living standards, it has no value in explaining the Irish situation. The idea that the fortunes of the Irish State are dependent on the whims of a cabal of banking executives and politicians (and their brood) is a fantasy, rolled out by an intellectual elite in response to stubborn voters who prefer to elect their next door neighbours rather than people who go to the theatre and quote Naomi Klein.
Yes, Ireland experienced a property bubble, and it exploded, and because we participate in a shared currency, the supply of which we do not control, our options in dealing with it were very limited.
But it takes more than just a few bankers and politicians to create a property bubble viagraindian.com. Its takes millions of people.
All of this was based on inflated property values, and while there were numerous individuals, politicians and organisations warning that a bubble was developing, the Irish people had no interest in such warnings; in our General Election of 2007, the composition of our parliament hardly changed. The previous Government was re-elected, narrowly defeating a slew of opposition parties, all of whom were offering the same heady mix of tax cuts, spending increases and ever-increasing property prices.
And contrary to Tana French’s claim that the people were being hypnotised into buying property by politicians, the exact opposite is true: the people were telling the politicians that if they didn’t let them buy or build houses, they wouldn’t vote for them.
By the time the crash came, we had the welfare system of Sweden and the income tax regime of the Cayman Islands. No other combination was acceptable to the electorate. Inevitably, the public spending and wage increases that were made possible by private banks lending billions of euro into the economy had to stop, and the blame game began. It was the banks fault. It was the politicians fault. It was the EU’s fault. If was everybody’s fault except ours.
The response of the State to the crisis fuelled the sense of outrage still further. Faced with the prospect of the financial system imploding, taking with it the deposits of pension funds and small businesses all over the country, and Money Supply in the economy virtually disappearing overnight, the Government had 2 choices: to leave the EU and stock the banks with an Irish currency, or use tax payers money to recapitalise the banking system.
The choice of the later option, which was later to be chosen by several other countries faced with the same crisis, was a field day for the media and general commentariat. Rather than present the actual choices faced by the State, the public were instead served up conspiracy theories, in which government operatives were holed up in the basement of Department of Finance, filling wheel barrows with ï¿½50 notes, which were then being wheeled out the back door into the waiting limos of banking executives.
Two year later, this caricature of the Irish financial crisis had become an article of faith. The cuts to Health Care, Education and Social Welfare did not apparently arise from the disappearance of tax revenue that had been sustained by private bank lending, but from the State’s decision to re-finance the banks.
That narrative continues to enjoy rude health today, in 2013, despite the fact that no payments have been made to the banks since 2011, and that the payments to the banks, which are finite, are still dwarfed by our massive, and perennial, public spending commitments.
All that said, Ireland is not the broken state depicted by Tana French. The “enormous cuts to essential services” she describes have still left us with one of the most generous welfare systems in the EU. The “flood of emigration” is not some throw back to the Irish famine of 1845, but the gradual process of 300,000 economic migrants returning to their home countries. Nor does Tana French mention the thousands of people who come to live and and work in Ireland every month, filling jobs in our flourishing IT and Bio-Scienses industries.
On the other side of the fiscal equation, tax collection,ï¿½independent analysis has shown that Ireland’s efforts to reduce our budget deficit are the most progressive of any of the EU countries who have recently been required to make dramatic adjustments to their public finances. Indeed , it is ironic that Tana French should state she wants answers for the “taxes piled on taxes” when as an author, she doesn’t pay any income tax in the first place.
Moreover, while every democracy experiences its share of political corruption and low standards, Ireland’s political system remains one of the most open and transparent in the developed world. Our Taoiseach (Head of Government) is a former school teacher, and most of our parliamentarians come from similar backgrounds. The idea that people of such limited ability should have their hands on the levers of power is anathema to our intellectual elite, but if a parliament is not representative of its people, it has no meaning or legitimacy.
Indeed, democracy may well be the real victim in the story of Ireland over the last ten years. The concept of democracy is not a single edged sword, in which the people get to make the decisions and someone else gets to clean up the mess. Democracy has to punish as well as reward, because without pain, the body politic does not learn from its mistakes, and inevitably repeats them.
What Ireland needs to do now is look forward, to be at ease with the notion that nations are as capable as individuals of making mistakes, and to understand that hard work is the only true ingredient of success.
If we continue to respond to every challenge with moral outrage, fuelled by the muddled revisionism of commentators like Tana French, we will have learned nothing from our experience, and that will be a true tragedy.