Have We Learned Nothing From The Crisis?

Do you remember 2007? The economy was booming (or so we were told) and the government was swaggering. This was all due to their wisdom and excellent management they told us. Don’t throw it away, they told us, by electing that other crowd, or even worst still, those leftists who might try to regulate the property market. There is was no debate over whether the property boom was sustainable or if the banks were properly regulated. Those who questioned if all parts of society were benefiting or if the government really knew what it was doing were dismissed as moaners. Questions over whether giving tax cuts so that people could buy bigger houses was the best use of resources were ignored. The system was working so don’t question it.

Do you remember the 2007 election? The political parties fell over themselves in the rush to see who could bribe voters the most. There was no planning, no vision for the future, just pure auction politics designed solely to win the election. Neither Fianna Fáil, Fine Gael nor even Labour had any concerns about the property boom, they only squabbled over how much taxes should be cut by. They all agreed that the best way to manage the market was to get out of its way and let it create wealth. The idea that markets should be left alone was one of those things that supposedly everyone knew. That and that house prices always rise.

We all know what happened next. It turns out that an unmanaged economy is like an uncontrolled fire. The government was surprised to find that years of tax cuts had left the state unable to pay the bills. Leaving the market to its own devices made it reckless and greedy. The rampant speculative bubble of reckless loans for overpriced houses collapsed in a spectacular manner. Under-regulated banks took huge gambles that went bad. The economy went into a steep decline and it seemed that the news had nothing but job losses and bad news every day. Banks got bailed out and the rest of us got shafted.

At least I think we all know that, but it seems that people have already forgotten. It is election time again, but it seems that most people are acting as if nothing changed since 2007. Yet again the election is little more than an auction of who can cut taxes the most. There is still no long term planning, still no thought about what kind of nation we want to be. It’s as if the Celtic Tiger never ended, we have money today, so who cares about tomorrow?

Absolutely nothing has been done about the root cause of the crisis. Everyone knows the banks were under-regulated during the boom, but no new regulations have been passed to strengthen control or ensure that banks are less reckless in the future. Nor has anything been done to prevent another property bubble from forming. In fact, many still see a rise in house prices as a sign of recovery and growth in the economy. We’ve fallen off a cliff and have done nothing to prevent it happening it again.

The core belief of the main political parties is remarkably unchanged. They still believe the market works best when left completely alone. They still avoid involving the government majorly in the economic cycle, preferring to follow the cycle than change it. In a decade or so there will be another recession (there is always one a decade on average) which will take us by complete surprise again. I doubt we’ll learn much from that one either. History repeats itself, first as tragedy, then as farce.

This plan was dumped as soon as the election was over

Or remember the last election in 2011? All the promises that Fine Gael and Labour made? How they opposed all the cutbacks and voted against every government budget? How they opposed the Fianna Fáil plans for water charges and a property tax? How they voted against the welfare cuts and (Labour in particular) promised they would not do the same? How they denounced the bank guarantee and bailout, and how they would stand up for taxpayers and force the bondholders to take their share of the burden? How they opposed student fees which Labour would abolish and Fine Gael would replace with student loans? How Fine Gael had a five point plan to get Ireland working? That they would create a completely new, universal healthcare system that would work for us all? And on and on.

Labour would implement the same policies they criticised Fine Gael and Fianna Fáil for

I think we’ve forgotten. I think we’ve forgotten all the lies and broken promises and are ready to be fooled all over again. People who a few years ago were so furious at the bank bailouts are now content to vote for the people who implemented them. People who swore never again after the mountain of unemployment are satisfied that “only” 320,000 people are unemployed. 8.6% unemployment is a catastrophe anywhere else, but Ireland it’s a success. People say that election promises exist to be broken and politicians always make false promises. While I understand the cynicism, I don’t think the solution of voting for those who so blatantly lied to us is going to solve the problem. Is it any wonder politicians lie when they know people will still vote for them anyway? Madness is doing the same thing again and again and expecting different results. Continually voting for liars in the hope that they eventually turn honest is not a strategy I would recommend.

Just as in 2007, the government is running on the platform that their superb management has caused the economy to boom. As in 2007, this is more of a case of the government being in the right place at the right time. In reality, the government has far less control over the economy than they would like us to believe, at least when there is economic growth doing well. When there’s a recession, suddenly the narrative flips and a host of external factors suddenly become extremely influential. I fail to see how four years of stagnation and one year of growth is a great achievement worth boasting over. The fact 320,000 people still can’t find work, to say nothing of those who can only find low paid temporary work or pretend jobs the government uses to pretend the unemployment rate is lower. Considering how many people have emigrated, it’s no surprise that the unemployment rate has dropped. When historians look back on this period, they will probably call it a lost decade or even a lost generation.

For some strange reason, Irish people have an obsession with electing a local politician. Questions of whether the politician is actually capable of doing their job often seems to be secondary to how close their house is to your house. On canvasses I’ve seen voters react with distaste when they found out the candidate was from a town ten miles away, as if it was the other side of the world.

My home has its own local TD who is regularly elected despite the fact he is completely clueless and incompetent. The strange thing is that most people know this. Not even his supporters would claim he is smart or has any good ideas (or any ideas at all), instead the fact that he’s from the parish is enough. He drinks in the local pub and people see him around the town, probably because he rarely bothers to even go to the Dáil. He fixed the potholes, got traffic lights at the crossroads (at least he claims) and has the same surname as half the parish.

He also supported the policies that led to the property bubble and opposed all measures that would have prevented the disaster. He did nothing about the gaping inequality in Ireland or those who were left behind. He voted for all the budget cuts that screwed over the poor and vulnerable as well as the bank bailouts that protected the rich and powerful. Thousands of women secretly flee to England to get abortions because people like him don’t care. Our healthcare system is a mess that prioritises the patient’s wealth over their health and TDs like him are doing nothing about it. His only accomplishment is to have one of the lowest speaking times in the whole Dáil while also having one of the highest expense claims.

(This is a parody, but many take it as advice)


The fact he’s from my local parish didn’t do me a damn piece of good when I spent months looking for work. He might be my neighbour but that didn’t stop him from hiking my student fees while at the same time slashing my parent’s wages as public servants. Long after he’s retired (on a pension larger than anything I can dream of earning) I’ll still be paying off the debts caused by the banks recklessness. The fact that he lives in the local parish is pretty meaningless when so few of my friends and former schoolmates still do, so many are now working abroad. I’m actually living in Slovakia at the moment, because at least here I could find a job worth doing. He liked to take credit for the Celtic Tiger and how it was due to the wise economic policies he supported. He would like if we all forgot that these same policies nearly bankrupted the country.

It’s easy to be cynical about Irish politics and think it can never be changed. But we can change something, even if it’s not much. Our votes count for something and if we don’t use them, then we let the gombeen politicians win. If we sell ourselves short and keep voting for politicians even after they break their promises just because they’re local, then we are only rewarding the very things that are ruining Irish politics. As soon as I head the election was called, I booked my plane ticket home from Slovakia. Half the country may have learned nothing from the crisis, but I remember.

3 thoughts on “Have We Learned Nothing From The Crisis?”

  1. “Nor has anything been done to prevent another property bubble from forming.”

    -You sure it was a bubble?

    “In fact, many still see a rise in house prices as a sign of recovery and growth in the economy.”

    -See; it might not have even been a bubble, just a sustainable boom followed by an unsustainable bust.

    “They still avoid involving the government majorly in the economic cycle”

    -The government (in both Brussels and Dublin) is always majorly involved in the economic cycle.

    “8.6% unemployment is a catastrophe anywhere else, but Ireland it’s a success.”

    -Clearly what’s needed is mandatory wage cuts.

    “He would like if we all forgot that these same policies nearly bankrupted the country.”

    -Ireland was the fastest-growing economy in Europe over the past forty years. A little near-bankruptcy over half a decade ago seems mild in comparison, and was clearly a result of excessively loose and inflexible government spending.

  2. An “unmanaged economy”? Really? Was it unmanaged because there are no government regulations on the books to manage it? Or was the real problem that government regulations and enforcement of those regulations was subject to political will and its corruptibility? Did the regulations, if enforced, really benefit consumers and the economy in general, or did they tend to distort the economy and use the power of government to favor certain privileged groups at the expense of everyone else?

    My god, this sounds like an echo of U.S. economic crisis of 2007-2008, and perhaps not uncoincidentally, seems to have occurred around the same time. We do live in an increasingly global economy, after all. I could repeat my previous comments and note that government regulations are not necessarily beneficial or efficacious, but I’m sure you’re tired of reading that. However, it might be worth pointing out that it’s a great conceit of politicians that they think that they can somehow truly control or manage the economy. Or, at least, they’re determined to let the voters think that they can. Unfortunately, the best they can do is to distort the economy and redirect the flow of money away from some areas and sectors and towards others, usually leading to an unsustainable boom followed by an inevitable bust, the so-called “business cycle” that really should be called the “government cycle”.

  3. Also, it might be worth pointing out that you undercut your own argument about the power of voting and electoral politics in bringing accountability to government. Aren’t Irish voters simply voting for what they want? Aren’t the Irish government and the political parties simply exercising the “will of the voters”? If not, then why not? Is the Irish electoral system simply not “democratic” enough?

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