How we blew the boomMonday 23 March 2009 11.07
Watch George Lee's documentary about about facing up to the truth about the Irish economy, retracing our steps and finding out how we can reshape the way we do business to fight our way back to the top.
March 2009, the bare hard facts of Ireland's economy are plain for all to see. The first three months of the year have brought bank nationalisation, record levels of unemployment, astronomical personal debt and the fastest growing budget deficit in Europe.
Ireland has faced hard times before in the 50s, 70s and 80s. Each time we had to get up, embrace change and find our feet all over again. Leadership, a new sense of direction and a willingness to face up to difficult truths, they were the keys then and remain so now. In November 1965, Sean Lemass said, 'A defeatist attitude now is certain to lead to defeat.'
Three years ago the Minister for Finance, Brian Cowen, announced a €9bn surplus in his budget speech. He promised to use the riches of the boom to create a fairer and more equitable Ireland. We were in the middle of a bubble and were prospering like never before. Michael O'Sullivan, author of Ireland and the Global Question says, 'Ireland became the poster child for globalization'.
As the boom continued we spent whatever we had and more! Thirty-something Erica Cash from Killiney in Dublin said, 'Pretty much what we wanted to do we were able to do and I never kind of stopped and thought about money or lack of money'. Erica was not alone, we were all at it, spending like there was no tomorrow.
The take off of the Irish economy in the late 1990s had been based on manufacturing and exports. We were selling to the rest of the world. In the early part of the new century that changed as the Fianna Fáil/Progressive Democrats government introduced tax incentives to encourage a domestic property bubble.
Economies are cyclical and our boom could not last. Last June it was official Ireland was in a recession. Our bubble had burst. But worse was still to come in the autumn as the country felt the effects of the international financial crisis. Stock markets all over the world plummeted and Ireland's blue chip bank shares fell through the floor.
John O'Connor from Kerry sold some land and invested in stocks and shares and says, 'We always thought we were secure for ever. It's after being halved, we're not, and we're not as secure as we were.'
Now with the world in recession, the likes of which has not been seen since the 1930s, Ireland faces the toughest test for a generation.
Among those George speaks to are: Dan O'Brien, Senior Editor, Economist Intelligence Unit, Tom Garvin, Professor of Politics, UCD, Economic Consultant, Peter Bacon and Michael O'Sullivan,
author of Ireland & the Global Question.