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Ship of Fools: How Stupidity and Corruption Sank the Celtic Tiger |  | Author: Fintan O'Toole
Publisher: Faber and Faber
Category: Book
Buy New: $16.00
as of 3/16/2010 07:10 CDT details
New (7) from $16.00
Seller: pbshop
Rating:  2 reviews
Sales Rank: 1370236
Media: Paperback
Pages: 240
Shipping Weight (lbs): 0.7
Dimensions (in): 9.1 x 6 x 0.8
ISBN: 0571252680
EAN: 9780571252688
ASIN: 0571252680
Publication Date: November 5, 2009
Availability: Usually ships in 1-2 business days
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Product Description
Between 1995 and 2007, the Republic of Ireland was the worldwide model of successful adaptation to economic globalisation. The success story was phenomenal: a doubling of the workforce; a massive growth in exports; a GDP that was substantially above the EU average. Ireland became the world's largest exporter of software and manufactured the world's supply of Viagra. The factors that made it possible for Ireland to become prosperous - progressive social change, solidarity, major State investment in education, and the critical role of the EU - were largely ignored as too sharply at odds with the dominant free market ideology. The Irish boom was shaped instead into a simplistic moral tale of the little country that discovered low taxes and small government and prospered as a result. There were two big problems. Ireland acquired a hyper-capitalist economy on the back of a corrupt, dysfunctional political system. And the business class saw the influx of wealth as an opportunity to make money out of property. Aided by corrupt planning and funded by poorly regulated banks, an unsustainable property-led boom gradually consumed the Celtic Tiger. This is, as Fintan O'Toole writes, 'a good old-fashioned jeremiad about the bastards who got us into this mess'. It is an entertaining, passionate story of one of the most ignominious economic reversals in recent history.
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| Customer Reviews:
It's not just Ireland . . . . . January 1, 2010
Theodore A. Rushton (PHOENIX, Arizona United States)
2 out of 4 found this review helpful
Magnificent.
This is a magnificent description of past, present and future housing collapses. Change "Ireland" to "Phoenix" and change the names of the greedy, and it applies to Arizona. Likewise for every locale with a housing crisis. O'Toole is a masterful observor of the human folly that leads to ruinous speculation; it's a delight to read on that level alone.
Why do such collapses occur?
Any mother can explain it, in their answer to a child who wants to do something "because everyone else is doing it." Mom replies, "If all your friends were to jump off a bridge, would you do it too?" The answer is supposed to be, "Well . . . No." But, consider the logic: If everyone does it, then it must be fun, easy and safe. Left on their own, bankers revised this "monkey see, monkey do" reasoning to "banker see, banker do" logic.
As a banker once explained to me, "If the bank down the street is making this type of loan, then we must match them or do even better."
It's the nature of a competitive economy. You don't win if rivals out-compete you. Children are inveterate competitors; but, they play by rules and regulations. 'Lord of the Flies' speculates on what happens when children have no rules; perhaps we now need 'Flies of the Bankers.'
This book fits the bill nicely.
What happens when common sense is not applied? Consider Tiger Woods as someone who thought he was above the usual rules of marriage. Alan Greenspan, to his eventual sorrow, thought the financial community could restrain itself. Canada understands government exists to restrain irrational exuberance.
O'Toole details the results of builders and bankers allowed to compete with almost no rules, thanks to deregulation. It's not just Ireland or Arizona, it's human nature. When the housing market collapses, bankers picture themselves as victims rather than perpetrators; as victims, they have no sense of social responsibility. To paraphrase Ronald Reagan, "Bankers are like babies. An alimentary canal with a big appetite at one end and no sense of responsibility at the other."
It's why babies are handled very carefully . . . at both ends. Bankers need the same handling. No such care was provided for bankers, builders or politicians. O'Toole has written a magnificent account of how people destroy themselves by not knowing when to say "enough."
Riveting and profoundly depressing March 12, 2010
David M. Giltinan (San Francisco)
0 out of 1 found this review helpful
"The role of sheer idiocy should not be understated. As finance minister, Charlie McCreevy's credo was a textbook statement of macroeconomic illiteracy: 'When I have the money, I spend it, when I don't have it, I don't spend it'. This childish mantra, ... obliterating at a stroke everything that governments worldwide had learned about the need to restrain a runaway economy by spending less and boost a flagging economy by spending more, was the economic equivalent of bulimia: binge and purge, binge and purge".
As the Celtic tiger lies puking feebly into the gutter, surrounded by the debris caused by the bursting of one of the worst real-estate bubbles on record, the Irish economic boom has come to a painful, screeching halt. By August 2009, the month when the Irish prime minister finally dropped his "Celtic tiger as a template for economic development" speech from his speaking portfolio, the level of debt among Irish households was the highest in the EU, GDP was predicted to shrink by 13.5 percent in 2009 and 2010, Government debt had almost doubled in the preceding year. With a fifth of its office spaces empty, Dublin had the highest vacancy rate of any European capital and was rated as having the worst development and investment potential of 27 European cities. The Irish stock exchange had fallen by 68% in 2008....
The litany of depressing statistics goes on. In this book, Fintan O'Toole, a political commentator and columnist for The Irish Times, sets out in chilling detail the particular combination of factors that led to such a catastrophic end to Ireland's economic boom. Chief among them are:
* the enduring failure of successive governments to enact anything even remotely resembling regulatory controls on the banking and financial sectors
* a culture of cronyism and turning a blind eye to financial malfeasance of the most blatant kind - even when the taking of kickbacks by those in office was established beyond doubt by several investigative tribunals, penalties were nugatory to non-existent
* the Ahern government's continued feeding of the construction bubble through the creation of ever-more ridiculous tax incentives
* failure to invest profits during the boom years in areas that might provide long-term stability, such as infrastructure and higher education (probably the most depressing part of O'Toole's litany of governmental ineptness is the section that documents the abysmal ranking of Irish graduates in the areas of computer science and information technology)
Even though I've lived outside of the country for the last 30 years, I'm still an Irish citizen, and I found this book thoroughly depressing. O'Toole's jeremiad is not particularly well-written - one senses it was written in haste, and the editing is remarkably sloppy. Writing style may have fallen victim to his passion at times; nonetheless, he paints a picture which is quite clear and thoroughly depressing. I'd like to think that those shown to be particularly venal will pay the price -- I don't need Fintan O'Toole to tell me that this is altogether unlikely.
This will be of interest to anyone with some connection to Ireland, probably not all that interesting to anyone else.
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