In memoriam the Celtic Tiger

In the debates about current events in Ireland, it is often now suggested that the ‘Celtic Tiger’ was all an illusion and that it never really existed, or that if it did it consisted almost entirely of a sleight of hand connected with a property bubble and banking misconduct.

Without wanting in any way to take away from the seriousness of what Ireland now faces, that kind of perspective on the Celtic Tiger is seriously misplaced. Even after all the stuff we are about to experience, Ireland will be an immeasurably richer country, with a wholly different infrastructure and economic capacity, than might have been expected back in the early 1980s. The property bubble was not the substance of the Celtic Tiger, but rather an aberration that resulted from it. Until 2004 or so the bulk of our economic activity was in exports of goods and services, rather than trading in property or domestic consumption. You can trace the transition from this to the more recent unviable distortion of the economy by reading the annual reports of the National Competitiveness Council (which correctly identified what was happening and warned about it early on).

It is worth making this point in order to remind ourselves that not everything that we did, or even that our politicians led us in doing, was wrong. It is just that eventually we all lost touch with reality. But we can, and I suspect we will, return to a more viable version of economic success. Our ability to do that will not be helped by enthusiastically adopting a hugely distorted vision of recent Irish history.

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13 Comments on “In memoriam the Celtic Tiger”

  1. Vincent Says:

    Again I’m sorry, but if you design a gold-rush situation it is unreasonable to be surprised that there will be a bust. And the UK, Irish and all other economies that draw their genesis from the English Crown will if left untrammeled react in such a way.
    Canada and to some extent Australia did not have such a dramatic collapse. But only due to one little requirement on the banking regulator, and of course a few trillion from the Fed Res in the USA.
    True, it’s grand that I can run from Dublin to Galway Cork Kilkenny and Waterford in jig time nowadays. But the actual reality is had there been ANY foresight in this State, we should have had such roads in the 60s at the very least.
    But no, we then as now arse kissed the visitors. Then from Whitehall, that were running what remained of the Sterling Area. And why, because the Departments were devoid of any concepts that could conceive of anyone from New College Oxon being in error. Naturally of course, they weren’t. Leastwise they weren’t in error for their own State.
    Why exactly is it again that we pay twice or three times for that which can be done in the UK.
    How exactly can anything be a Good if it’s result is the borrowing from the IMF of 100 billion in order to repay another 100billion and ending up with 200billion repayment. All due to none believing that we could repay the first 100 billion.
    And quite honestly, there was no place on the Island that was so far from a Airport that exceeded to run from Bristol to Heathrow.

    • Vincent, you wrote: “How exactly can anything be a Good if it’s result is the borrowing from the IMF of 100 billion in order to repay another 100billion and ending up with 200billion repayment. All due to none believing that we could repay the first 100 billion.”

      Sure, but none of that was a necessary consequence of the Celtic Tiger.

      • Vincent Says:

        I disagree. It is as necessary as night following day.
        Many view the Celtic Tiger to be as a result of education or tax. But the reality is, it came about because we have a system that’s designed to respond in that way to the slightest amount of speculation.
        And when this opportunity to speculate is not present on this Island it will move to where it is.
        I shall explain what I mean in this way. The actions of the old landlord class and the corresponding reaction of the peasant class are precisely replicated today. Where the only difference is the ‘Who’ functions as the landlord. And there is a major boom-bust every 30 or so years. The ‘or so’ aspect hinges to the world wars. 1850’s; 1890’s; there was one due about 1920 but went out a bit; 1950’s; 1980’s and this one. This matches the lease cycle.

  2. Jason Michael McCann Says:

    It is beyond doubt that the Celtic Tiger was a real beast; its bones are now on display in the Natural History Museum right next door to where it was butchered. You have pointed out one distortion, allow me to point out another: “not everything that we did, or even that our politicians led us in doing.” This is more of a bare-faced lie than a distortion. Unless this “we” is the ‘royal we’ of a nepotistic system, it is as wrong now as when An Taoiseach Charles Haughy first peddled it in the 1980s. The Celtic Tiger was not a corporate venture of the whole Irish people, and not everyone benefited from it. Peter McVerry SJ reminded me on Thursday evening past that during these ‘years of plenty’ homelessness doubled in Dublin.

    • I’m trying to get hold of data about homelessness, actually. I suspect that any increase (and I’m not even sure that that is correct) in the period from 1995-2007 is due to immigration; though I need to stress quickly that I am strongly in favour of immigration.

      As for the ‘we’, sorry, virtually the entire irish people got on the bandwagon. It’s no use screaming now about how we were misled. Anyone who sold a house at inflated prices, or spent money rather than save it, was part of the movement that created disaster. The refrain ‘It wasn’t me, it was all just Fianna Fail’ is part of the malaise: unless we all (or most of us) accept that we behaved crazily, we are likely to do it again. In any case, Fianna Fail were elected, it wasn’t a coup d’etat.

    • Jason Michael McCann Says:

      This argument works only when the government provides an alternative to private housing; the simple truth is that that the Fianna Fail government failed in this regard. It created an artificial housing crisis – which everyone seems to have forgotten about now. The state never provided the number of houses required for the housing lists, particularly in the cities. The local authorities moved out of publicly owned housing and sold existing stock, moving from the provision of social housing to the provision of rent rebates through the supplementary welfare allowance administered by the Department of Social, Community and Family Affairs. For many it was not the case of free choice to buy, but the need for family security and the lack of alternatives.

      Numbers of homeless nationwide:
      From the Simon Community

      You are correct that “we” (not in my name) voted for Fianna Fail, but this needs to be evaluated properly. It seems that when it comes to the ballot box people are still fighting the Civil War in Ireland.

  3. copernicus Says:

    I visited Ireland first in 1979, and that was the visit to University of Cork for a job interview. I did this just to see the country as I was paid the travel expenses. Landing at Dublin airport , going through the city and until I travelled to the railway station to take the train to Cork, the experience was similar to visiting Wales. But the train station, the slow train and the Cork itself were a shock. I realised that Ireland though rural, was very much underdeveleped. It needed gradual development recognising its strengths and weaknesses. but then after joining the elite EU small group , it got loads of dosh, which acted like anabolic steroid to a puny cat. Then came to EuroZone and there were festivities, and the cat roared like a tiger. There was no real naturally enhanced performance from the cat, but the effect of steroids meant that the cat’s sprint was remarkable for a time perhaps they said equalling the feat of a leopard, and the drug was not bad at all. Well, the effect of the drug cannot last long as its metabolic pathways went wrong, and the result is very debilitating indeed.

  4. Colum McCaffery Says:

    You make a very important point in distinguishing between the wilfully stupid and destructive creation of a local property bubble and the true decline of the “Celtic Tiger”. The truth is that he had sloped off to die unnoticed perhaps a decade before the present crisis descended.

    Among the things that need to be done before we develop policy for the future is to look at why the productive economy declined to such an extent that a property boom of such magnitude was needed to obscure reality. Garrett Fitzgerald has called for an enquiry into this aspect in isolation.

    However, this “we” talk must stop. There were many, many people who did not benefit at all from the silly policies. There were also many, many people who spoke out against the silly policies and it is clear that such people are the “right stuff” needed for the future. What of the “wrong stuff” whose view prevailed? Let us be clear, the problem was there to be seen by anyone with a shred of intelligence; no expertise was required to notice that factories had closed while furniture stores opened at virtually every roundabout. Those in politics, media, banking, education etc. who failed to speak up should be kindly moved aside as lacking the basic ability required for their posts. There are some who saw the problem but – possibly with their career prospects or a quiet life in mind – lacked the integrity to speak out against daft policy. These are more culpable. However, be the cause stupidity or lack of integrity, anyone in a prominent, senior, responsible or public position in Irish life who did not voice opposition to reckless stupidity must go away and be quiet because we have work to do for which they are unqualified.

    • The productive economy didn’t decline, it grew. But the pace of its growth was later outstripped by the property bubble.

      • Yes, I expressed that very poorly. What I meant to say was that it is vital to examine the decline in competitiveness that resulted in closures, whose effect was masked by the construction nonsense. Garrett has argued that essentially we must reduce wages to compete. This could be expressed in more emotive terms as, “we need to win a race to the bottom!” My point is that leaving the bubble aside, this is the debate we must have.

    • Colum, I would dispute the ‘many. many people’ stuff. It was a very small number, very small indeed, who ‘spoke out against silly policies’, and those that did often had completely different reasons from those that became relevant in the end.

      Too many people traded in unrealistic values, bought excessively large cars and spent too much money abroad. It is dangerous to deny that – very very many people were complicit in our disaster. Let’s not quickly re-write history now, because we need to learn some lessons in order not to repeat this madness.

  5. Oh but we ARE re-writing history and that’s precisely what is worrying me. I’m tired of listening to the lie that “we lost the run of ourselves” and that “no one could have seen this coming”.

    Apart from the fact that many citizens behaved prudently, any fool could have seen this coming. Some chose wilful ignorance. Some perhaps genuinely were too stupid or ill-informed to see what was before their eyes. It simply was not possible for an averagely intelligent, reasonably informed person to travel in this country and avoid seeing what was happening.

    However, I’m making a clear distinction between the general population – many of whom behaved foolishly – and those who are PAID to know better. These people have failed to do their jobs. It would be very silly indeed to keep them on.

    I’m certainly not saying that all of the foolish should sacked from ordinary jobs but I’m not going to accept that because there was mass foolishness, then leaders, experts, journalists/presenters, teachers, managers etc. should simply be allowed to continue.

    The fact that sheep have been found to be stupid does not mean we can do without competent shepherds!

  6. cormac Says:

    I agree in geneal but dispute the word ‘wealthy’. I think Ireland reained a country of relatively low public wealth throughout the celtic tiger.
    When I moved to waterford in 1996, the contrast between Aarhus(Denmark) and Waterford was like moving from a 1st world country to a third world one, in terms of public transport, housing and health.This didn’t chag much in the ensuing 10 years

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