March 31, 2009

Just when it seemed the current financial crisis would overwhelm our capacity to understand, when the cause and effect diagram was hopelessly criss-crossed with double-arrowed lines of blame, we were rescued.  Not by our own personal bailout, but by the emergence of villains.  Evil bankers, evil corporateers (thank you American AIG bonus recipients, for keeping it going) and incompetent politicians (true evil seems to imply the type of brainpower that people are, for some reason, unwilling to attribute to politicians) are being hauled from their glittering lairs to face the glare of public hate.  We have our scapegoats. 

Suddenly public fury has a target.  It's them.  A greedy cabal of puppetmasters at the top of society who have been callously pulling our strings for their own enrichment.  People who care only for themselves, creating extravagant lives and making extravagant deals in an insular world of excess and bacchanalia while the rest of us go quietly about our business.  We are shocked to find speculation going on. 

Scapegoats are handy.  They make things simple.  Who caused this crisis? They did, the others. In Ireland, the others are the bankers, and the regulators who looked at their, um, unique and clubby accounting methods with an extremely benign eye.  Although it seems that, in Ireland, lending yourself millions from your own bank, taking loans on and off the books to avoid oversight, providing loans to your fellow banks disguised as ordinary depositors and other accounting innovations are not actually illegal.  Oops.  We're not going to get our Bernard Madoff moment, when the mighty are led off in chains.

It's clear that the people with the most money at their disposal in the manic Celtic Tiger years were finding the most creative ways to make even more money, and apparently no idea was too outlandish.  But they weren't the only ones.  In fact–remember?–it was only 18 months ago.  We were all at it.   

People with land could suddenly ask 100,000 euro and more for a half acre site that would have cost 20,000 pounds ten years ago.  And get it.  Property development became far more lucrative than farming as the next field over was transformed into tightly packed terraced housing.  People with shacks in scenic spots were selling them for 400,000 and taking off for Spain. 

People with money were trading up with "prestige" mortgages (ever class conscious in Ireland)–more than 100% of the purchase price (when you buy a million euro home–and a million doesn't buy you much in Dublin and Wicklow–you do have to furnish it)–based on their well-paying, professional jobs (remember when solicitor, banker and accountant were solid gold professions?).  

People without money were buying half million euro homes, taking on giant mortgages from unprotesting banks. The house would be worth 100,000 more than you paid for it two months after you bought it, so why not?  As the value of the house went up, the value of your credit went up. So you could borrow more, and buy more.

And everywhere, everywhere, we were spending.  There was a waiting list for Hermes handbags at 5000 euro.  Newly rich property developers threw 250,000 euro parties for their daughter's 21st birthday.  On weekends, when Ireland's new immigrants were picnicing at the local beauty spots, the locals were at the mall. 

And hey, why not?  A wealthy Ireland, a confident Ireland, a happy Ireland, despite the weather (actually, wealth allowed a lot of us to escape the weather, with second homes in Turkey and Spain), was a great place to be.  Young people, in particular, seemed like a completely new species of Irish: confident, optimistic, certain of their place in the world.  The Economist said this was the happiest place on earth.  Who wants to argue with the Economist? 

We were all in it, not just them.  Not just bankers and not just politicians (who we re-elected convincingly two years ago).  All of us thought it would last and last.

Of course those in positions of trust and power who abused that trust and power should be held accountable.   But not solely accountable.  Not turned into scapegoats, made to bear the weight of the entire debacle.  I think scapegoating, like conspiracy theorizing, arises when you feel powerless, when it seems that some secretive and enragingly unknowable force is in control of your world, not you.  It's a backwards, maybe ancient way of seeing things, when humans were subject to many forces they didn't understand, with which they could only be angry or placating.

Ireland is not that kind of place anymore, a place where people just try to stay low and get by as they're randomly buffeted by outside forces (England, famine, the Pope).  And our bankers, regulators and politicians are not omnipotent.  In fact, it's pretty clear that none of them knew what the hell they were doing. 

So now the money's gone and we can't get it back.  Well, we're the ones who took on those mortgages, racked up the credit card debt, bought the second home and threw that quarter million euro party for our 21-year-old daughter. Now we have to do something else, change our choices.  And change our laws and regulations so the ambitious and the greedy (who often do great things while handily enriching themselves) play a lot less fast and loose with money that's not theirs. 

But hey, this is a democracy; we can do that.  We don't need permission from bankers, regulators or politicians.  We're supposed to tell them what to do.  We don't need scapegoats; we need to remember our own power, access it and change things. 

It will be the new Ireland, still.  But maybe with a little less bling.