Motley Moose – Archive

Since 2008 – Progress Through Politics

When Irish Eyes Aren’t Smiling – UPDATED

This diary is guaranteed to cheer you up… How?

Firstly, as Americans, you ought to know that there are many European countries who have responded in an even worse fashion to even more parlous economic woes. Secondly, there’s always the immense intellectual satisfaction of “I told you so” when exploring the further disastrous ramifications of our global financial system.

Even if you’re facing unemployment, surveying  your recently repossessed house, is there at least some residual bleak satisfaction in saying “I was right”?

Follow me below the fold for an international schadenfreudefest (™ Strummerson)


Exhibit A: Ireland; The Celtic Tiger Eats its Own

Once hailed as the Celtic Tiger, Ireland was one of the fastest growing economies in the EU from the relative poverty of the 1980s (when I first visited it) to the spectacularly expensive inaffordable place I reencountered a couple of years ago.

Dublin had changed beyond all recognition. Everywhere was gentrified, and every other building seemed to be a bank. A round of Guinesses suddenly set you back 30 bucks or more. House prices in the capital were more expensive than London, and even a tiny cottage in remote Kerry (where I was attending the wedding of one of Obama’s staff) was priced at a staggering $300,000.

But all this wealth was based on massive bank deregulation, derivatives, personal debt, and propounded on the ridiculous and unsustainable rise in property prices. The Economist Morgan Kelly foresaw all this in 2007

Kelly, of University College Dublin, was laughed at, scorned and even threatened when he correctly predicted, as long ago as 2007, that Ireland’s property bubble was heading for a spectacular explosion.

Now he is forecasting mass mortgage defaults and an ugly popular uprising. The first stirrings are already visible, he says, with “anxiety giving way to the first upwellings of an inchoate rage and despair that will transform Irish politics along the lines of the Tea Party in America”, giving rise to a new “hard-right, anti-Europe, anti-traveller party”.

So you heard it here first. Your domestic Tea Party may be an early adopter of inchoate right wing rage, but the real backlash may find more expression in Europe, which has a more terrible history than the US on turning on strangers in its midst.

Exhibit B: The Rise of Right Wing Anti Immigrant Parties in Europe.

The rise of Islamophobia throughout Europe – a movement that has gathered a strange coalition of racists, anti clerical intellectuals, Neocons and Nationalist Conservatives – has already gained power within coalition Governments in traditionally liberal Denmark and Holland. The recent French vote to ban the wearing of Niquab in public places, the Swiss ban on the building of minarets, and the rise of the far anti immigrant right in Sweden, Austria, UK and Italy are just further portents. There is a mood of fear and retribution abroad here, which focuses not only the various Pakistan, Turkish, Algerian or Moroccan immigrants, but has also led to the mass deportations of Roma from France, and – even more worryingly still – the capitulation of the traditionally anti-racist Centre Right to the politics of fear.

The Guardian is running a series on the rise of the anti immigrant right in Europe, which you can keep track of here.

This is not just scaremongering. When Angela Merkel, the centrist Chancellor of Germany, says that multiculturalism has “utterly failed”, then you know that Europe has shifted to the xenophobic right, in its economic centre.

I’m always impressed how many Americans, when they talk about their country’s success, energy and innovation, talk about the role the immigration in that story. I’ve heard various people talk about wanting more immigrants to the US, to help power the country out of the economic doldrums….

That never ever happens in Europe.

So. Do you feel better or worse now?

Less flippantly, we’ve often warned of/talked about analogies with the 1930s. But this anomaly never ceases to amaze me

Why are those the least responsible, migrant labour, the victims already of globalisation and the fluidity of the financial markets, always the first to be blamed for its collapse?

UPDATE: Some more intriguing, indeed scary details, about the Irish situation can impact on other countries, in my comment below.


  1. creamer

    is the reason for our bubble. Apparently the least educated among us scammed the most educated among us and almost brought down the world. Power to the People!!

     I was listening to a guy named Lynch and somone else talk about Ireland today on NPR. He said that the Euro Central bank has already propped up Ireland to the tune of 9 or 10 Tarps. He mentioned that if that happened here their would be blood in the streets. Proably right.

  2. creamer

    most of their taxes at the 15% capital gains rate. He didnt think that was fair. Then he spent somtime complaining about George Soros and how much influence he had. I mentioned the Koch brothers and he said “Who?”.

      Our conversation turned to the money spent on influence and fine art among the super rich. And while he shook his head at the millions spent on some Chineese vase his eyes just glazed over when I mentioned how many people you could feed with those millions. Doesnt seem to see a connection between the chasing of power at the top, and the poverty at the bottom.

  3. Strummerson

    I was in Ireland 8 years ago for our honeymoon (we married on Bloomsday, the food was kosher and the whiskey was Irish, and went to Eire that August).  A friend and former house mate is the daughter of an Irish Labour Party luminary, former minister and Mayor of Galway.  He received us with home baked pies and fresh cut flowers, even did our laundry.  Sat with him that evening, at the height of the Celtic Tiger craze, and he lamented the ugliness of the term and predicted it would soon implode, dropping the working and newly middle class he had spent a lifetime promoting into the breach.  Guess he’s proven prophetic.

    On the other hand, given how things are booming here, this would be the perfect time to buy that little place outside Dingle we fell in love with out west.

  4. DeniseVelez

    and some in Britan which are following the story of the Roma (Gypsies) and their struggles in France.

    This was one interesting article:

    Europe and its Gypsies

    Glad  you  brought up the rise of ethnocentrism in Europe, Brit.

    Guess we are not alone in our “isms”, though as you point out we have always touted our immigrant roots as a nation,  which seems to be reversing now that many immigrants are the wrong color or wrong religion.  

  5. Shaun Appleby

    Down the same path.  Western governments are starting to assume the ethos and culture of the Medieval princes who feared yet protected the Church as it systematically stripped their peasants and yeomen of every asset that wasn’t already committed to the State or consumed.

  6. There’s some fascinating insight from Robert Peston, the excellent BBC economics correspondent who was the first to see and understand the derivative nightmare before the 2008 crunch

    Firstly Ireland’s debt is staggering:

    What’s more, if Ireland is fundamentally incapable of paying off all it owes – which is equivalent to an oppressive 700% of GDP when banking, public sector and private sector debts are added together -some will say it is grotesquely unfair that the cost should fall entirely on taxpayers in Ireland, the European Union and (if IMF money is drawn) the rest of the world.

    In such circumstances, it is only fair that irresponsible lenders, who gambled on the bubble in property prices, should lose some of their money by default, and take a ‘haircut’.

    But once again the ‘shadow banking’ system looms out of the darkness, and reveals the crazy derivative interconnectedness of the international banking system

    What would then be triggered would be enormous payments by underwriters of credit default swaps (CDSs), the debt insurance contracts taken out by lenders and speculators. These payments would generate enormous losses for the financial institutions, including banks, which provided the CDS cover.


    Sources close to the Irish government tell me that the US authorities are deeply concerned at the idea that CDS payments would be triggered in this way. The implication (yet again) is that insurance contracts designed to reduce risk are in fact a source of systemic instability. Which, of course, has been the hideous norm in the Frankenstein markets that have been engineered over the past decade or so.

    I quite like this new phrase Frankenstein Markets. It’s certainly a development from the Zombie Banks of the Japanese crisis. The whole market is mad.

    Even without the CDS loss multiplier, the impact of debt haircuts would be painful for British and international banks. According to the Bank for International Settlements, total lending of non-Irish banks to Irish banks is around $170bn, of which British banks provided $42bn, German banks provided $46bn, US banks $25bn and French banks $21bn.

    So we’re all roped together, like climbers on the North Face of the Eiger. If we don’t pull Ireland (and Greece and Portugal) out of the abyss, we could end up getting dragged down with them. But tugging on the rope hasn’t worked. Most western governments are running out of energy anyway. What about cutting the rope? Well then the Euro could collapse.

    It’s an amazing situation. As Shaun pointed out, Goldman Sachs now has more power than most small governments. And the deregulated global markets have created a situation where the markets can make or break entire societies, with no real form of oversight or governance.

    How did we let this happen?  

  7. spacemanspiff

    PR has always had a violent culture but it’s getting out of control. Another dude was shot where I hang out last week and now a friend got 20 bullets on his way to his house.  The killers le borraron la cara (they erased his face) which meant they were sending a message as well. The code in the streets is “DON’T SNITCH” which makes it hard to clear up crimes (and makes you a marked man if anybody found out). I would never go to the police and almost everybody thinks the same. I’ve lived in this environment for years now but at my age (almost hitting 30) I thought things would get better. Never thought I’d still be worrying about these things at this point in my life. It’s hard when one gets out and “makes” it while others are left behind. Dude was my friend. We weren’t as close as we once were but getting that call last night was hard as hell. Whenever you pick up the phone and a grown man is silent on the other line you know it’s bad news. All you have to do is ask: Who was it? Who’s dead?

    Why? Why did he have to die so young? I know why he was killed but still can’t wrap my my around it. Why did he have to go that route? He had made it to 30 (which is old in street years) and was doing relatively well. Guess no one knows what was really going on which is another scary part about all this. He knew he was a marked man yet he still went out and hung around the same places I did. It’s scary because innocent lives are caught in the crossfire. I think it’s time for me to seriously consider changing my home base and moving fulltime and irme palla afuera again. Sigh. Fucking drug wars.

  8. Strummerson

    Hear it on NPR this morning.  The Greens are calling for Jan. elections.  Fianna Fail is facing a fall, a failure of fantastic proportions (sorry, couldn’t help the alliterative escalation.

    Anyway, the interchange with PM Brian Cowan they played was absolutely ugly.  Supposedly, the Greens attended a cabinet meeting the previous night debating the EU bailout and didn’t bring it up.  The next morning, they blindsided the PM with 10 minutes notice.  

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