Follow the Money

[Howth and Ireland's Eye. County Dublin, Irela...

[Howth and Ireland’s Eye. County Dublin, Ireland] (LOC) (Photo credit: The Library of Congress)

Follow the Money, The Tale of the Merchant of Ennis, by David McWilliams is the story of how the Great Recession came to Ireland. The Irish were affected like the rest of the world by the Great Recession originating on Wall Street, but they made it worse in their own way. When Ireland adopted the Euro as their currency, it enabled their banks and their property developers to go on a building spree. Prices on homes and commercial property skyrocketed as some got rich and many others tried to. 100% mortgages were widely available.

When the crash came and people lost jobs and could not meet their obligations, the Irish government in cahoots with the banks and the old-boy network of Ireland’s 1%, bailed out the banks and the wealthy at the expense of everyone else. The author argues against austerity and in favor of a currency devaluation. That is not possible if Ireland retains the Euro. His solution is to leave the Euro, devalue Ireland’s currency, and then rejoin the Euro later. His point is why should the nation suffer to save a few wealthy individuals and a few banks?

This book is an interesting read with logical arguments, in my opinion, against too-big-to-fail. What happened in Ireland resembles what is happening here in the US as well as the experience of other European nations now, particularly Greece. The people of Greece are suffering so that banks, especially in Germany, do not experience any losses on their loans.

The Guard

The Garda Trafic Corps in Dublin

Image via Wikipedia

Yesterday evening, my wife and I went to see The Guard, a gem of a movie set on the west coast of Ireland. My wife is of Irish extraction and had visited the area while I had not. Connemara faces the Atlantic on the same latitude north as Dublin. The title in English, The Guard, refers to Garda Síochána na hÉireann, Guard of the Peace of Ireland, the Irish Police.

A sergeant in the Garda, Gerry Boyle, investigates a murder and tries to stop international drug smugglers from landing a multi-million dollar shipment of cocaine along the coast. He is aided by an American FBI officer. The two play off each other masterfully.

The movie has abundant violence and salty language; it is not suitable for children. It is suitable for thinking adults who appreciate a movie with heart and an attitude and no car chases or special effects. The movie is not yet available on DVD. Catch it at a local theater if you can. You’ll be glad you did.


The logo of Boomerang in Latin America.

Image via Wikipedia

Boomerang, Travels in the New Third World by Michael Lewis, the author of Liar’s Poker and Moneyball, recently made into a film starring Brad Pitt. This slender volume is an eminently readable tale of how the Great Recession is affecting five different countries: Iceland, Greece, Ireland, Germany and the US. His  thesis  is that different cultures react differently to the shock of economic disaster.

If people are given the opportunity to live beyond their means, most people will do so. Almost everyone in Greece is corrupt; no one pays their lawful taxes. All 300 members of the Greek Parliament cheat on their taxes. To expect Greece to change its customs now when facing national default is too optimistic. And a Greek default could bring down the Euro affecting the US adversely.

Germans live by the rules, and it will be up to Germany, the financially strongest country in the European Union to bail out the rest of the members of the European Union who may need help. Iceland went bankrupt because it thought that its banks could outsmart the big banks of London and New York who had both more assets and more experience. Ireland went mad with construction of commercial and residential structures for which there was no foreseeable demand.

Here in the US, our ties to one another have become frayed. Instead of looking out for one another, it has become a game of grab all you can while you can before someone else does. We need to watch out for each other and cooperate in this time of need if we are going to survive the Great Recession, which shows no sign of ending and is likely to worsen.

On the steps of a fire-bombed bank in Athens, Lewis saw a sign quoting an ancient Greek orator named Isocrates who lived from 436 BCE to 338 BCE: “Democracy destroys itself because it abuses its right to freedom and equality. Because it teaches its citizens to consider audacity as a right, lawlessness as a freedom, abrasive speech as equality, and anarchy as progress.” True then–true today.

Please see Great Depression 2