Government

Michael Lewis On Ireland's Boom And Bust

Michael Lewis visits Ireland for his latest piece of financial-disaster travel journalism. It's in this month's Vanity Fair. His basic take:

Even in an era when capitalists went out of their way to destroy capitalism, the Irish bankers set some kind of record for destruction. ... Left alone in a dark room with a pile of money, the Irish decided what they really wanted to do with it was to buy Ireland. From one another.

This was partly driven by the fact that, by the time the global credit boom got going in the early 21st century, the Irish — after being very poor for a very long time — had already had a decade of strong economic growth.

At the bottom of the success of the Irish there remains, even now, some mystery. "It appeared like a miraculous beast materializing in a forest clearing," writes the pre-eminent Irish historian R. F. Foster, "and economists are still not entirely sure why." Not knowing why they were so suddenly so successful, the Irish can perhaps be forgiven for not knowing exactly how successful they were meant to be. They had gone from being abnormally poor to being abnormally rich, without pausing to experience normality. When, in the early 2000s, the financial markets began to offer virtually unlimited credit to all comers—when nations were let into the dark room with the pile of money and asked what they would like to do with it—the Irish were already in a peculiarly vulnerable state of mind. They'd spent the better part of a decade under something very like a magic spell.

A few months after the spell was broken, the short-term parking-lot attendants at Dublin Airport noticed that their daily take had fallen. The lot appeared full; they couldn't understand it. Then they noticed the cars never changed. They phoned the Dublin police, who in turn traced the cars to Polish construction workers, who had bought them with money borrowed from Irish banks. The migrant workers had ditched the cars and gone home. Rumor has it that a few months later the Bank of Ireland sent three collectors to Poland to see what they could get back, but they had no luck. The Poles were untraceable: but for their cars in the short-term parking lot, they might never have existed.

Lewis's next financial-disaster travel destination is California. He's already written about Iceland and Greece (and, of course, about the U.S. housing bust)

For more on Ireland: Listen to our podcast, "Too Big To Save"

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