If there really is a recovery, Paddy seems determined not to learn any lessons from the greed and stupidity that drove us to the poorhouse, writes Donal O’Keeffe.
A few years ago, the editor of the Avondhu was chatting with a developer whose properties were now in NAMA. As they discussed the state of the country and how it had got there, the Editor ventured his opinion that at least this could never happen again.
The developer looked at him and suggested he give it fifteen years or so before the cycle came again full circle.
“Do you think,” the developer asked, “that my son won’t be as greedy as me?”
I thought of Liam’s friend last weekend as I read in the Irish Times Simon Carswell’s “Is there a boom? Is it getting boomier?”
The title is a play on “the boom is getting boomier”, a misremembered malapropism attributed to Bertie Ahern (The Bert having actually said ‘boomer’). In the piece, Carswell talks about a “Phoenix Miracle”, a term used to describe the presumed economic recovery.
“Phoenix miracle” is a phrase coined by Guillermo Calvo of Columbia University to describe an economy that experiences a rapid rise from the ashes of recession, creating new jobs and attracting new investment without seeing any rise in debt. Calvo based his model on studies done on the Asian economic crises of the 1990s.
Carswell says “We may not be back in a credit bubble but… house prices are rising by up to 9% nationally and 10.2% in Dublin… and couples are camping overnight to be first in line to buy new houses.”
Before “Phoenix Miracle” became the phrase du jour, some commentators had spoken – irony-free – of a “Celtic Phoenix”, doing so presumably unaware that the phrase was originated by Charles O’Carroll-Kelly. If you’re unfamiliar with Mr O’Carroll-Kelly, he’s a blowhard property developer who was elected as a local councillor in Dun Laoighaire in 2004 and who was jailed two years later for corruption.
Mr O’Carroll-Kelly is also the founder and currently the only member of the political party “New Republic”, once described (by this author) as the party which would at last give a voice to Ireland’s most under-represented constituency, conservative Catholics.
It could be argued that Mr O’Carroll-Kelly is most famous as the father of the Irish Times’ fictional columnist Ross O’Carroll-Kelly. I spoke on Saturday with the author Paul Howard, who earns a crust as Ross’ Boswell. I asked Howard if Charles is happy to see the Celtic Phoenix he predicted coming to pass.
“Yes, Charles is back to counting the cranes on the skyline again,” Howard told me. “Boom and bust capitalism – we never fell out of love with it despite everything. It’s kind of like what Churchill said about democracy: ‘It’s the worst system of government in the world, apart from all the others’.”
(It’s worth noting that ‘New Republic’ would have been a perfect name for any real life new political party, had Howard not already rendered it verifiably beyond use. There’s a rumour that Lucinda Creighton had wanted to use it but had to settle for “Renua Ireland” as a second choice. As with ‘Celtic Phoenix’, Paul Howard has a gift for knowing the zeitgeist and getting his reductio ad absurdem in first.)
The homelessness campaigner Father Peter McVerry, told Simon Carswell that phrases such as “Phoenix Miracle” annoy him, when homelessness levels are soaring and 7,100 people are seeking emergency accommodation. McVerry makes the point that many of those falling into homelessness are working people who cannot pay the mortgage or the rent.
“The recovery has left a lot of people behind and they are not just poor people. These are people who have worked hard, done all they were told would make them successful. Those who are being left behind will (hear such phrases and) just feel more and more that they don’t count.”
McVerry’s assertion is borne out by the experiences of Cork Penny Dinners. In 2011, that charity supplied approximately one hundred meals per week to homeless people in Cork. In 2017, that figure is closer to two thousand meals per week.
What’s more, Penny Dinners’ volunteers say they are now serving meals to people the charity never saw before, not ‘just’ homeless people or ‘just’ those with drug or alcohol dependency. Now they are feeding people who have jobs, families with small children, people just about meeting the rent or paying their mortgage and who can’t afford food.
Penny Dinners also supplies a weekly shop to several households, literally to put food on the family table.
Paul Howard is scathing about the prospects of a “Phoenix Miracle” in a country which has gone in so short a time from a housing surplus to a housing crisis.
“Even from the earliest days of the financial crisis, the priority for the Government – once they’d performed the conjuring trick of turning billions of euros of private debt into billions of euros of public debt – was to resuscitate the housing market. Which meant rebuilding the economy based on people selling houses to each other.”
And that cuts to the core of the issue. It seems we have learned nothing at all from the crash if we think our salvation can only lie in returning to the notion that an entire economy – let alone an entire society – can be founded on the pyramid scheme that is a property bubble.
Four years ago, two bedroom apartment in Hanover Quay were selling for €280,000. Now, the Sunday Times reports, they’re a snip at €650,000.
Paddy might like to know what the story is, as Enda Kenny once claimed, but Paddy never seems to learn any lessons from the story, even if it’s a story that ends with an entire country in the poorhouse.
When I spoke with Paul Howard, he very kindly relayed to me a statement from Ross O’Carroll-Kelly, who is now very gainfully employed with the estate agents and property management firm Hook, Lyon and Sinker.
“I really hate people talking down the Property Bubble,” Ross told me. “I think this one is actually going to last. And the next one. And the one after that.”