DUBLIN, IRELAND -- "The bold encroachers on the deep
Gain'd by degrees huge tracts of land,
Till Neptune, with one gen'ral sweep
Turns all again to barren strand."
"This poem" -- ("The Run Upon the Bankers") -- "was printed some years ago, and it should seem, by the late failure of two bankers, to be somewhat prophetic," wrote Jonathan Swift in 1720. 
The poem is somewhat prophetic again. The Celtic tiger -- the Irish economy that boomed in the 1990s -- no longer roars. It whimpers. The great engine of high employment for good jobs has fallen. The Press Association reports that unemployment applications in January were 80 percent higher than a year before. The unemployment rate in Ireland is 9.2 percent and expected to climb, perhaps as high as 15 percent. A real estate market that, according to Bloomberg, quadrupled from 1997 to 2007, is crashing.
Who will meet the mortgages for all the country's new tract homes? Neptune? Of course, there's a banking scandal. The government pumped 7 billion euros (U.S.$8.79 billion) into the country's two largest banks this month. One of the banks had engaged in sleight-of-hand loans to disguise its sorry finances last year. There have been sweetheart loans made to well-connected richies.
As in the United States, Ireland's politicians don't emerge smelling like roses. Irish Finance Minister Brian Lenihan was forced to admit that he did not read the entire report he had commissioned to examine the banks' situation before pushing for taxpayer-funded relief for them. Approval ratings for Prime Minister Brian Cowen's Fianna Fail Party have fallen to a historically low level of 22 percent, according to the Press Association.
The once-respected job of banker has the taint of shame. On the flight across the pond, I heard two business travelers introducing themselves. One man offered that he worked for a well-known U.K. bank, one only marginally discredited in the news. It didn't used to be a bad thing to mention his bank, he sighed.
Continued... |