Wednesday, November 10, 2010

Putting the ire back in Ireland

Anybody have a spare leaf?

We Yanks could teach the Irish a few things about bank bailouts and mortgage pathology. Well, actually, it looks like we have.

I can't say I've been following the Irish economic debacle very closely — it's hard work just keeping up with our own — but an article in the Irish Times summarizes it. Apparently, the taxpayers of the Irish Republic are generously going to be picking up the tab, some 70 billion euros, for three big rupt-banks.

The writer, Morgan Kelly, has the traditional Irish gift for words. Some of his juicy observations:
SAD NEWS just in from Our Lady of the Eurozone Hospital: After a sudden worsening in her condition, the Irish Patient, formerly known as the Irish Republic, has been moved into intensive care and put on artificial ventilation.
… The true scandal in Irish banking is not what happened at Anglo and Nationwide (which, as specialised development lenders, would have suffered horrific losses even had they not been run by crooks or morons) but the breakdown of governance at AIB that allowed it to pursue the same suicidal path.
Once again we are having to sit through the same dreary and mendacious charade with AIB that we endured with Anglo: “AIB only needs €3.5 billion, sorry we meant to say €6.5 billion, sorry…” and so on until it is fully nationalised next year, and the true extent of its folly revealed.
Where the first round of the banking crisis centred on a few dozen large developers, the next round will involve hundreds of thousands of families with mortgages. Between negotiated repayment reductions and defaults, at least 100,000 mortgages (one in eight) are already under water, and things have barely started. 
If one family defaults on its mortgage, they are pariahs: if 200,000 default they are a powerful political constituency. There is no shame in admitting that you too were mauled by the Celtic Tiger after being conned into taking out an unaffordable mortgage, when everyone around you is admitting the same.

The gathering mortgage crisis puts Ireland on the cusp of a social conflict on the scale of the Land War, but with one crucial difference. Whereas the Land War faced tenant farmers against a relative handful of mostly foreign landlords, the looming Mortgage War will pit recent house buyers against the majority of families who feel they worked hard and made sacrifices to pay off their mortgages, or else decided not to buy during the bubble, and who think those with mortgages should be made to pay them off. Any relief to struggling mortgage-holders will come not out of bank profits – there is no longer any such thing – but from the pockets of other taxpayers.
Can it be but five years since the Irish were swanking it up with real estate windfalls and foreign investment, buying each other rounds of drinks without counting the cost? Has the whole Western world's government and business Establishment forgotten whatever common sense it ever had?

Best of Irish luck to you, friends, and we'll accept the same from you. Heaven help us all.



Anonymous said...

banking, immigration, 'there is no God', family is what we say it is, history be damned, white = evil, trust us we are from the government, IQ is not measureable, race is a social construct, education, "Civil Rights", 10th amendment, anchor babies, lawyers, etc. Is there ANYTHING the "Elites" over the last 100 or more years have not gotten wrong on the grandest of scales? Anything, anything at all? Just one thing, name one thing they have gotten right, one, that is all I am asking, in all seriousness.

Mr. Darby, you have a way with words yourself. I so enjoy your site, I just wish you were as prolific as Messrs. Sailer and Auster.


Rick Darby said...


Well, let's see. In a hundred years, our bigwigs must have done something right.

Okay, after failing to stand up to Hitler's Germany and helping to bring on World War II, the leaders of the Western powers were pretty sharpish about seeing off the Axis. Even better, they won the peace.

I guess we have to give them some credit for waiting until the Soviet Union collapsed before they collapsed us.

Thanks for the compliment about the blog. My motto is, "If you can't be smart, at least be entertaining."

Anonymous said...

For the most part the elites did not do the dying during WWII and what was that NY Times writer's name that wrote up the wonders of Uncle Joe's paradise even though he knew there was mass starvation happening in paradise. Duranty? Did'nt he receive some kind of Pulitizer? I seem to remember that c__t Fonda riding on N. Viet Cong tanks. BTW I lost a "white trash" brother to that war. The Elites have done nothing right, in my humble opinion, especially if you take the long view.

Maria said...

The space program. They did get us to the moon and back. And the Manhattan Project. Those are the things they got right.