Americans who think that their economy in bad shape should be glad that they don’t live in Ireland, where the economy seems to be completely melting down. “Matthew Engel”:http://www.ft.com/cms/s/0/070873bc-ff7d-11dd-b3f8-000077b07658.html has a grimly entertaining article on the collapse of the housing market, which has a bit too much stage-Irishry for my liking, but gets at the underlying political economy of the final years of Ireland’s economic boom.
the desperate developers of one estate, Athlumney Wood, did what practically every retailer in Ireland is doing: they held a sale and slashed prices by half. Last week they got rid of 25 properties. Semi-detached houses that once touched €330,000 ($416,000, £291,000) sold for €175,000. … Unlike anyone else’s, the Irish boom was essentially construction-led, and places like Athlumney Wood are the new Ireland. …
Indeed, it’s easy to believe that the cute-hoor party, covering politicians, builders, financiers, bankers, senior civil servants and every chancer in Christendom, has been running the place for their own benefit for years. Here, everyone who matters knows everyone else. But careful observers are more specific in their analysis. “There was an alliance between Fianna Fáil and the property developers,” says Jane Suiter, who teaches politics at Trinity College, Dublin. “The government saw light-touch regulation as giving Ireland competitive advantage. And as far as Ahern was concerned, the biggest multiplier for votes was construction jobs.”