More than a fifth of the Irish workforce was employed building houses. The Irish construction industry had swollen to become nearly a quarter of the country’s G.D.P.—compared with less than 10 percent in a normal economy—and Ireland was building half as many new houses a year as the United Kingdom, which had almost 15 times as many people to house. Since 1994 the average price for a Dublin home had risen more than 500 percent. In parts of the city, rents had fallen to less than 1 percent of the purchase price—that is, you could rent a million-dollar home for less than $833 a month. The investment returns on Irish land were ridiculously low: it made no sense for capital to flow into Ireland to develop more of it. Irish home prices implied an economic growth rate that would leave Ireland, in 25 years, three times as rich as the United States. (“A price/earning ratio above Google’s,” as Kelly put it.) Where would this growth come from?
18 comments:
Not sure if Lewis mentioned the single most important factor in Why Ireland Failed: that the semi-literate Bertie Ahern was Taoiseach for most of the boom. The fact that Ahern, first as for Minister for Finance, then as Taoiseach, and as a qualified chartered accountant, never opened / owned a bank account in his entire life says it all in a microcosm, really.
Cheers, Dec
I'm afraid economics bores me to tears. But I read the Q&A piece discussing Lewis' Irish sojourn/ Feb 2011 (linked at the bottom of the column) Reading about Michael Lewis' encounter with the 'King of the Travelers' was hysterical. Killian he was not!
Off topic...apologies!
Just heard Boulder's Bookend Cafe is closing. Thought you needed to know. http://www.dailycamera.com/boulder-business/ci_17923860
Where will all those muffins go?
Declan
But his daughter is the very literate Cecelia Ahern. . .If she indeed is the author of those books.
Trudy
There used to be five bookshops in one block. And it is a college town. If Boulder cant sustain its bookshops its not looking good for anybody is it?
No, it is not looking good for bookstores right now. The answer seems to be "Sidelines!". Which have a higher mark up than books ever did.
That was an excellent article. I don't usually look at Vanity Fair, because there is too much crap in it, but I know there are gems among the litter. I haven't read Lewis before, but I will say for those who think it might be too dry or technical, there is a lot of human interest in it. It's very sad. I wish the Irish people would take a page out of the book of Wisconsin and march on the capital. In peaceful protest, of course.
I especially liked the way Lewis spelled out the differences between the Irish situation and the American one, as, at first glance, they would seem to be similar.
I'll claim my usual two degrees of separation. My boss's husband once sat next to Lewis on a plane. They bonded over new fatherhood, apparently. The result was that Lewis showed him his new Kindle, which had been given him by his publisher. This is a few years ago, when that would still have been exciting.
Seana
It used to be that as a place to meet intelligent members of the opposite sex the bookshop was hard to beat. I dont think that thats the case any more though.
Yeah poor Ireland. Its going to be living through austerity budgets for at least 5 and more likely 10 years.
I think it's the case in our store still. Actually, there was a funny missed connections note left for one of our employees just last week. Apparently, someone has been throwing themselves without avail and had to take it to another level. Unfortunately, he is already taken.
In Santa Cruz, it's not necessarily the opposite sex that is the standard pickup hope, though.
I read in the paper that Ireland was ranked in the top 10 in a wellbeing poll. Comparing the happiness of various countries populations. I dont think England made the top 100. Two bank hols off in a row (thanks to the wedding)and the sun with his hat on Yipee! I reckon we would have made it to at least 80 in the poll.
Man alive, I finished this yesterday.
He's turning into one of the best GFC chroniclers out there.
I like how he made the whole thing easy to understand whilst not appearing to dumb it down.
Totally agree, Rob. Although I don't actually know what a GFC chronicler is.
Frankie
Australia's booming but most of the people I know in Melbourne are miserable. Could just be the people I hang out with.
Rob, Seana
Global Financial Collapse?
Loved this line: “What happened was that everyone in Ireland had the idea that somewhere in Ireland there was a little wise old man who was in charge of the money, and this was the first time they’d ever seen this little man,” says McCarthy. “And then they saw him and said, Who the fuck was that??? Is that the fucking guy who is in charge of the money??? That’s when everyone panicked.”
And I found the interview with the wise little man: http://www.youtube.com/watch?v=UuHRulXfzGA
We all have too much faith in those little old wise men, even though the Wizard of Oz has shown things to be otherwise for a long, long time.
Girish
I sometimes get scared by the comments under a youtube video but if they are in any way representative of opinion then the depth of anger has not even remotely abated in Ireland.
Seana
Didnt the Wizard of Oz get his comeuppance at the end too, or am I misremembering?
Well, he got seen through, but he did get to leave Oz, which apparently he wanted to do, so not really. And at least he didn't melt.
The one thing I wonder about Lewis's article is his statement that no one was ever going to buy those homes because no one was ever going to want to come live in Ireland. But I know several people myself who either have or have wished to retire there, and I'm sure there are tons of Irish Americans who would have loved to have a second home there. Still would.
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