The Celtic Tiger, Declawed and Defanged
By Michael Winship
DUBLIN -- The last time I was here in Ireland, eight years ago, the Celtic Tiger was still roaring. The country had zoomed from poverty to wealth, enjoying an unprecedented economic boom, with unemployment down to 4.5 percent and consumer spending and average wages at all-time highs.
But now? I stood on board a restaurant ship docked along a bank of the River Liffey with my friend and colleague David Kavanagh, executive director of the Irish Playwrights and Screenwriters Guild. His hand swept along the shore as he used the panorama of the city skyline to describe what has happened to the country’s economy in just two short years.
To the left, he pointed out the beautiful new Samuel Beckett Bridge, opened in December, shaped like an Irish harp placed on its side, and designed by the Spanish architect Santiago Calatrava. (In this city that reveres writers there are bridges named after Beckett, Sean O’Casey and James Joyce – a Calatrava design as well. He’s also the imagination behind the new World Trade Center Transportation Hub, under construction at Ground Zero in Manhattan.)
The Beckett Bridge cost 60 million euros to erect – about $80 million US (and no Waiting for Godot –like jokes about a bridge to nowhere, please). Near it stands Dublin’s brand new national convention center, built for 380 million euros – that’s almost half a billion dollars. Both structures epitomize the spending spree that once characterized Ireland’s booming prosperity.
Torn down to make way for the convention center were red brick Victorian warehouses where trains delivered goods for transfer to the cargo ships that once docked here. A handful of them still stand. But next door, rising jagged like a broken tooth, is the unfinished building that was meant to be the new headquarters of the Anglo Irish Bank.
When all seemed flush, and foreign capital was rolling in, the Anglo Irish Bank lent billions of euros to property developers, including the builders of the convention center. The building boom went bust, exacerbated by the burst of the global housing bubble, and the bank has gone belly up, nationalized by the Irish government, a bailout that according to an analyst at Standard and Poor’s may wind up costing Irish taxpayers more than $47 billion American.
In January 2009, The Irish Times editorialized. “We have gone from the Celtic Tiger to an era of financial fear with the suddenness of a Titanic-style shipwreck, thrown from comfort, even luxury, into a cold sea of uncertainty… the future now is not just uncertain but has suddenly become a threatening place.”
Last year, when I spoke with David Kavanagh, the running joke was that the difference between Ireland and Iceland was one letter and six weeks.
In 2009, the economy sank 7.1 percent. Emigration levels are at their highest in more than twenty years, with a 50 percent increase in Irish nationals leaving the country.
Ireland now has close to 14 percent unemployment and the biggest deficit in Europe -- proportionately higher than that of Greece. It could reach around 20-25 percent of its gross domestic product, but the country has not yet gone to the International Monetary Fund and the European Union for a financial rescue, as the Greeks have.
But despite government denials, that may be unavoidable. And Wall Street hedge funds aren’t helping. According to Ireland’s Sunday Independent newspaper, “The International Monetary Fund estimated that up to [about $4 billion US] of Ireland’s debt was being targeted by speculators through the use of derivatives. This practice is likely to have increased in recent weeks over growing fears that Ireland may default on some of [the Anglo Irish Bank] debt.” As one newspaper columnist wrote, “It’s contempt for how badly we do things allied to a gleeful determination to make easy money out of it.”
As in the United States, citizen anger has been vehement and vocal, with Anglo Irish and other financial institutions the regular target of raucous demonstrations, hurled tomatoes and rotten eggs. Rage, too, has been directed at the country’s politicians, the papers filled with constant reports of oversized salaries and expensive perks (nearly $30,000 spent by a government delegation for one night’s stay at an expensive Italian hotel during Pope John Paul II’s funeral; trips to the Cannes Film Festival and a St. Patrick’s Day celebration in Los Angeles; more than a million dollars of termination fees and pension payments to four members of the legislature who have decided not to stand for reelection).
The days of Brian Cowen, Ireland’s beleaguered prime minister – or Taoiseach, as they say here – are probably numbered, too, although he appears to have survived a mini-scandal after a somewhat befuddled and slurred interview on Irish radio that seemed hangover-induced. His already waning popularity nosedived even further but seemed to boomerang back after an apology and his appearance at that most Irish of events, the National Ploughing Championships.But curiously, despite the financial calamity and public indignation, there has been less here of the unfocused and often ill-informed fury typified by the Tea Party movement in America; in fact, most Irish with whom I spoke were perplexed by what’s happening in the United States. “America is going through an age of misinformation,” Irish journalist Una Mullally theorized in her column this past Sunday. “Fox News is sublime at creating an Orwellian arena of doublethink, but false information is being spread everywhere… The US is becoming increasingly polarized: politics, religion, money… But the biggest polarization is that of the truth.”
In a Dublin museum, I saw on one wall the words of a great truthteller, the sublime Dr. Jonathan Swift, author of Gulliver’s Travels, and long ago dean of St. Patrick’s Cathedral here. When he died in 1745, he left the bulk of his estate for the founding of a psychiatric hospital. He wrote these lines for his native Ireland, but I couldn’t help thinking they apply to us, too:
He gave the little wealth he had,
to build a house for fools and mad:
And showed by one satiric touch,
No Nation wanted it so much.
Michael Winship is senior writer at Public Affairs Television in New York City.