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The Celtic Chimera William K. Black
I’m writing from the scene of the first Kilkenomics Festival, which brings together finance experts and professional comics to try to answer the public’s questions about why the world is suffering recurrent, intensifying financial crises, why Ireland has gone to the heights and crashed spectacularly, and what options does it have that other nations in crisis have used successfully.
David McWilliams, an Irish economist, and Richard Cook the man that started the Kilkenny comedy festival (Cat Laughs) decided to create an economics festival with sessions run by professional comedians questioning the economists. This is an utterly bizarre idea, so I accepted immediately. It turns out that professional Irish comics are every bit as quick and well read as you would have guessed by extrapolating from what you see on Jon Stewart’s Daily Show. (Irish angst and Jewish angst bear a strong resemblance.) There’s a long European tradition of the “fool” being able to mock the pretentious and powerful and bring out the truth. Talking to the comics and answering their questions forces us to speak clearly and bluntly - or be skewered. The public love it (both parts - getting clear answers to their questions or watching the comics skewer us) and the roughly 20 events have been sold out.
Ireland was known as the “Celtic Tiger.” It shot to economic fame. From the poor man of Northern Europe, it was transformed into a nation with a reported per capita GDP equivalent to that of the United States. The old, true, and painful joke: "What’s Ireland leading export? (Answer: “the Irish”) was reversed as people began to move to Ireland.
Unfortunately, the Celtic Tiger was ultimately revealed to be a Celtic Chimera. Irish bank supervision was so weak and Ireland’s banks so wild and crazy that the New York Times called Ireland the new “Wild West.” Ireland’s largest banks hyper-inflated twin bubbles in commercial and residential real estate. They grew massively. Fortunately, Lehman failed and the Irish banks’ ability to grow collapsed - which meant that the bubbles imploded in late 2008. Had it not done so, the Irish banks would have continued their staggering growth and caused almost incomprehensible losses (relative to the size of the Irish economy) when the (vastly larger) bubbles finally collapsed.
…(cont’d)
Interesting. So instead of blaming Lehmans and its far-reaching testicles Bertie, Cowen et al should be thanking the gods that it failed - if it hadn’t, the Irish banks would have merrily continued down their property speculation path, which would have potentially placed this country beyond even the help of the IMF.
There was an article in the Korean Times about this today, along with two other articles discussing the impending bailout. It is not just the English speaking world and Europe that knows about our troubles…
