Tuesday, April 12, 2011

“Unique opportunity exists to transform our country”


During the second half of 1996 and throughout 1997 Garret FitzGerald was arguing in his columns in The Irish Times that the economic future for Ireland was going to be one of spectacular growth, due mainly to the reversal of our dependency ratio - the proportion of the population that did not work or pay tax, such as children, retirees and so forth, relative to those who did both of those things - coupled with the then rising global economy. If Morgan Kelly was the prophet of the bursting of the property bubble then Garret, although his writings are not always for the numerically challenged, was the forecaster of the economic conditions that would facilitate its beginning. On Saturday 13th. April 1996, exactly 15 years ago on this day, the prescient headline on Dr. FitzGerald’s piece read: “Unique opportunity exists to transform our country”.

Well, of course, the country has been transformed. However, the old Chinese proverb that warns one to be careful of what one wishes for is immediately brought to mind. We flew high but, like Icarus, went too close to the sun. God be with the days when our Minister for Finance, a certain Brian, of the Cowen clan, could be envied by his counterparts from all the countries in the developed world as the finance minister whose economy effectively ran itself and for which the only way was up. As late as 2009 Eurostat, the European Commission body with responsibility for statistics, ranked Ireland’s per capita Gross Domestic Product (GDP) as second only to Luxemburg. In other words we were, on average and on paper at least, richer than The Netherlands, Austria, Sweden, Denmark, the UK or Germany. Two years later we’re dependent on the transfer of funds from these countries, both collectively and individually, in order to be able to pay the salaries of our teachers, gardai, civil servants and all others in the public service, not to mention expenses for our senators and Dail deputies.

It was good while it lasted, though. Anybody who read a paper or watched TV at the height of the boom could not but be impressed with the way our image was presented abroad. No sooner was a senior Irish business person or politician retired than he or she was off on the lecture circuit to explain to everybody else how it should be done. That this earned significant fee income which might be used to top up your pension fund without raising your tax bill, thanks to the thoughtfulness of a previous Minister for Finance, was just an added bonus.

Now it’s changed, and changed utterly. We have attracted the attention of the debunking cohort of international journalism, such as Mr. Michael Lewis, a writer for Vanity Fair magazine whose claim to fame revolves around his authorship of the controversial book (admittedly the best kind) called “Liar’s Poker”, detailing his time with Salomon Brothers, the scandal riven Wall Street investment bank which eventually became part of Citigroup.

Mr. Lewis has produced a significant piece for the current issue of Vanity Fair, describing the outcome of a visit to Ireland to report on our travails, called “When Irish Eyes Are Crying”. As can be imagined from the title, it’s written for US consumption. While it is a fair account of how the drama unfolded, Mr. Lewis cannot resist references to fairy forts, apparent incessant rain and a theory, presumably his own, of how the lowering of our dependency ratio coincided with the lifting of the ban on condoms and other methods of contraception. The aforementioned Morgan Kelly comes very well out of the article, as is his entitlement. All the familiar actors are also there, such as David McWilliams, Patrick Neary, Seanie Fitz, Bertie, Brian Lenihan - complete with garlic chewing anecdote during his nocturnal visit to meet with McWillaims - and Joan Burton with a typical, acerbic witticism:

“Do you know that Irish people are now experts on bonds?” says Burton. “Yes, they now say 100 basis points rather than 1 percent! They have developed a new vocabulary!”

The gentleman who threw the eggs during the AIB Annual General Meeting in 2009, Gary Keogh, is there, as is Joe McNamara, who drove his concrete mixer truck into the gates of Leinster House. All in all, Michael Lewis manages to press all the buttons.

So where, apart from dealing with the other side of the international press treatment, does Ireland go from here? Undoubtedly, we have to manage our way out of the crisis, and for that we should be open to the assistance of our European friends, among others. And there have been benefits, such as in the form of road and rail infrastructure, which is not to be minimised. These developments will stand us in good stead as the global economy improves and as the excellent IDA Ireland continues its sterling work among the Foreign Direct Investment (FDI) global community. It is a pity, and a real shame, of the sort that comes along from time to time to remind us that we can be prone to both hubris and hypocrisy, that more was not spent on all levels of education when we had the wherewithal to do so.

And we might pay more attention to our academics, especially when they crunch the numbers.

No comments: