Ship of Fools (12 page)

Instead of seeking to end these distinctions, government politicians began to behave as if they were themselves part of the aristocracy. There was a sense that since, in their own eyes, they had done so much to create the boom, they ought to live like its heroes. It was therefore proper that they should be paid very large salaries. A
Financial Times
survey in March 2009, after the Taoiseach Brian Cowen had taken a 10 per cent pay cut, still found him to be almost at the top of the tree among world leaders. Dmitri Medvedev's salary was €67,000; Gordon Brown's was €199,000; Angela Merkel's was €228,000; Nicolas Sarkozy's was €240,000; Cowen's was €257,000 and Barack Obama's was €292,000. Even this somewhat understated what Irish leaders thought they were worth during the boom years. In 2007, Bertie Ahern proposed paying himself €310,000 a year, which would have made him the best-paid politician in the democratic world, had public opinion not forced a deferment of his salary increase.

This sense of entitlement to the high life was reflected in
the lavish conduct of senior politicians. Many ministers began to ape the ostentation of the class with which they identified. Even though they had high-end state cars and chauffeurs, they insisted on travelling like property developers, in helicopters and private jets. Sharing the motorways with ordinary citizens was beneath them - often quite literally. Between January 2007 and June 2009 alone, ministers used government jets or fixed-wing planes (a Lear jet 45, a Gulfstream IV, a Beech Super King Air and a Casa) and Air Corps helicopters 144 times for internal flights within Ireland. Mary Harney, for example, took twenty-four flights in that period, flying to exotic destinations like Galway, Cork, Kerry and Shannon. Harney had form: in December 2001, she used an official fisheries surveillance aircraft, part-funded by the EU, to fly to Leitrim to cut the ribbon for an off-licence store for a barrister friend of hers.

Abroad, Irish ministers travelled like sultans on tour. On one infamous trip to Florida, paid for by the state training agency Fás, Harney and her party took the government jet at a cost of €80,000. The taxpayer forked out $410 for hair treatments at their lavish hotel. The Arts, Sports and Tourism minister John O'Donoghue, his wife and his private secretary ran up a hotel bill of €5,834 in Venice. At the Cannes film festival, he stayed in the €990-a-night Hotel Montfleu and spent almost €10,000 on hiring a chauffeur-driven limousine. Another limo during a trip to the UK for St Patrick's Day came to €8,843.

In purely financial terms, this lavishness was of little importance, but as a statement of the way government politicians saw themselves, it mattered a great deal. It revealed the film that was running inside their heads, a glamorous, sun-kissed international epic in which they moved through a
world of speed and ease, of drivers and flunkies, fine wines and gourmet dinners, in which money was of no consequence because it was infinitely available. It placed them, when they were not in the grubby world of constituency politics, in an insulated, air-conditioned universe, floating above the clogged-up, stressed-out, often squalid physical realities of life in boomtime Ireland.

This fantasy of celebrity glamour didn't just draw politicians into the mental universe of the super-rich. It separated them from the other side of aristocracy - poverty. The image of Ireland, as they lived it out with their high salaries and lavish expenses, was seriously out of synch with the reality.

One problem caused by the speed of the boom was a tendency to exaggerate just how rich Irish people really were. Because growth rates were so high, and because the general improvement in prosperity was so spectacular, Irish people in general felt rich. This feeling was bolstered by the figures showing GDP per capita rocketing above that of many other European countries, including the old master, Britain. But these figures were deceptive, both because GDP, which is simply an annual index of wealth-production, does not give an accurate reflection of things like accumulated wealth and quality of life, and because, in Ireland's case, it is significantly inflated by the financial juggling of transnational corporations with an interest in boosting profits in low-tax Ireland.

Thus, GDP per capita undoubtedly ranked Ireland as one of the wealthiest nations in one of the wealthiest parts of the world, the EU. But GNP per capita, which excludes the money that transnational corporations are sending home and is thus a more accurate measure of real national income, placed Ireland just slightly above the average for the fifteen member states of the old EU. So Irish people as a whole were
not in fact all that rich. Even using the exaggerated measure of per capita GDP, average wealth per head was pretty similar to, for example, North Yorkshire or Oregon. If Ireland actually were, as Mary Harney and others liked to fantasise, a US state, it would have been the thirty-fifth richest, a little wealthier than traditionally underdeveloped Arkansas but poorer than Rhode Island, Nebraska or Georgia, and less than two-thirds as wealthy as New York.

When Bertie Ahern proposed to pay himself an increase of €38,000 a year, it was striking that this increase alone was greater than the total salaries of 1.5 million Irish workers. Three-quarters of the workforce, in other words, was on €38,000 a year or less - a very modest salary in a country with an extremely high cost of living, high levels of mortgage debt and social services. People paid through the nose for facilities like childcare that were free or heavily subsidised in other European countries. It is also striking that, certainly by late 2007, there was an obvious disjunction between the constant propaganda that told these workers that ‘we' were rich and their own experiences. In a Bank of Ireland Life survey of people in full-time employment earning more than €30,000 a year, 70 per cent agreed with the description of Ireland as a ‘wealthy country'. But 79 per cent also agreed with the statement that most Irish people were not really wealthy but rather were ‘obsessed with the trappings of wealth'. And 76 per cent agreed with the statement that ‘it's all about keeping up with the Joneses'. Ireland was rich, its people were not, and the gap between one reality and the other was filled by attempts to acquire the outward trappings of a wealth you did not really have.

Even for those in decent jobs who were clearly benefiting from the boom, the levels of debt required to service mortgages
and run cars, combined with inflation rates that were much higher than the rest of Europe, were not conducive to feelings of economic security. In a Guinness/Amarach survey published in March 2002, when debt levels were nothing like what they would become by 2008, a massive 44 per cent of people agreed with the statement: ‘I worry sometimes about how much money I have borrowed and whether I'll be able to pay it back.'

 

Below this broad mass of people who were doing reasonably well but anxious about debt there was a persistent level of squalor. Some of this was physical: primary school children in the largest classes in the EU, many in abysmally ramshackle, overcrowded and unsanitary buildings; hospital waiting areas so filthy and overcrowded that the regular comparisons with ‘Third World' conditions were understandable exaggerations.

But the underlying squalor was social. The greatest shame of the boom years was the abject failure to get rid of consistent poverty. That it was possible to do this with the unprecedented resources at the state's command was acknowledged even by Fianna Fáil. In its manifesto for the 2002 general election, written with the experience of five years of government and presumably in the knowledge of what could be done even within the framework of Celtic Tiger orthodoxy, it made a bold pledge: ‘For the next five years we are setting the historic target of effectively ending consistent poverty in our country, with a minimum target of reducing it to below two per cent.'

The best evidence of the failure to reach even this minimum target was the Fianna Fáil manifesto for the 2007 general election. It made no reference to the target at all, not
even to repeat the promise. It stated merely that ‘The achievements of the last 10 years confirm that we have the possibility of becoming one of the few countries in the world to effectively eliminate consistent poverty.' There was no target, no commitment, merely a bizarrely vague reminder of the ‘possibility' that a country with the resources that Ireland had acquired could ensure that no one lived large parts of their life in poverty.

The reason for this complete shift in tone was obvious: the government had not ended consistent poverty or even reached its ‘minimum' standard of 2 per cent. In 2007, at the height of the boom and after a decade and a half of almost uninterrupted growth, the level was two and a half times the minimum target. For children (7.5 per cent in consistent poverty), the picture was even uglier.

Beyond those living in poverty for long periods, the numbers defined as being ‘at risk of poverty' also remained high. Eighteen per cent of the population was in this category in 2007 (compared to 10 per cent in the best-performing EU countries) - and 40 per cent of these people were children. With the collapse of the economy, rapidly rising unemployment and sharp cuts in public spending, these figures will certainly rise over the coming years.

The government failed so miserably to achieve its goals on poverty because it no longer actually believed in the republican concept of equality. With no sense of irony at all, it was the Minister for Equality, Michael McDowell, who told the
Irish Catholic
that ‘A dynamic liberal economy like ours demands flexibility and inequality in some respects to function. ' It was such inequality ‘which provides incentives'. ‘Driven to a complete extreme, the current rights culture and equality notion would create a feudal society.' The bizarre
logic of this sentence perhaps betrayed the strain of excising equality from republicanism, which McDowell always claimed as his political philosophy. It was not the deliberate fostering of an unaccountable, untaxed super-rich elite that was in danger of creating a feudal Ireland, but the looming threat of the ‘culture of rights' and the notion of equality as it stalked the Celtic Tiger to its lair. McDowell's view of the medieval world seems to have been shaped by the scene in
Monty Python and the Holy Grail
when peasants scrabbling in the muck declare themselves an ‘anarcho-syndicalist commune'. The threat of revolutionary feudalists seizing power in Ireland was not unreal, and indeed it had already come to pass, but not quite in the way that McDowell's Pythonesque world-view seemed to imagine.

McDowell's leader, Mary Harney, helpfully glossed his comments for tabloid-reading dummies who might be confused by such convoluted thinking: ‘It's like a football team: Some make premier division and others aren't so good, unfortunately.' If Ireland had both a Manchester United class of pampered and idolised superstars and a Drogheda United class of slow-witted cloggers, this had nothing to do with politics or power, but was simply the working out of genetic and temperamental differences: ‘everybody is not the same, people have different skills, different capacity, different IQs, different strengths.' (Oddly, this apparent support for raw meritocracy did not prevent the government from protecting inherited wealth by abolishing estate duties and cutting inheritance tax.) The typical right-wing confusion of sameness and equality barely concealed a profound belief that inequality was the proper order of things. Genetic differences had simply expressed themselves in the fact that some people had lots of money and paid no tax and some people had very
little money and paid lots of tax. This being so, the existence of a ‘free' elite at the top and a slough of poverty at the bottom was simply inevitable. It was Social Darwinism and not crony capitalism that had decreed that the likes of the Bailey brothers should sit on top of the Irish evolutionary tree. That this might be a rather disappointing outcome to all those millennia of human development did not dampen the PDs' enthusiasm for the doctrine.

This was not just a minority PD view. Fianna Fáil, for all its republican posturing and occasional genuflections towards egalitarian ideals, held it too. Defending McDowell's remarks, Fianna Fáil minister Willie O'Dea said that ‘If there's inequality of wealth in a society it gives people who aspire to better themselves the incentive to gain more wealth.' Inequality, by implication, was essential to the functioning of the economy. It was the red meat that fed the Celtic Tiger.

The social consequences of this new doctrine that inequality is good were obvious in the persistence poverty amid plenty. But the world-view which it expressed also fed directly into the economic catastrophe that was about to befall Ireland. It justified the notion of an elite that operated at a higher level than those who lacked their betters' IQs, skills and capacities could ever really comprehend. It encouraged politicians, who ought to have maintained a social and intellectual distance from that elite, to ape its ways and share its fantasies. It fed the egos of developers and the bankers who lent them larger and larger amounts of cash. Already high on self-delusion and a sense of invulnerability, the last thing most of them needed was a further boost to their egos. The Irish already had their own gentry. They didn't need them to start thinking they were kings.

‘Just pucker up your lips and blow'

- Lauren Bacall,
economic adviser to the Irish government, 1997-2007

 

 

 

Paddy Kelly didn't have a Rolls-Royce. He had, as he corrected his interviewer, Eamon Dunphy, on RTE Radio at the end of November 2008, ‘several' Rolls-Royces. He didn't have a house on Shrewsbury Road, where, perhaps because it was the most expensive property on the Irish version of
Monopoly,
all the developers wanted to live. He had two houses on Shrewsbury Road. He hadn't yet gone bust - that would take another few months - and the ‘hundreds of millions' of euros he confessed to owing the banks were, he said, ‘no great burden' to him. But he was, nonetheless, one of the oppressed, the heir to a legacy of great suffering and injustice whose every triumph was a blow struck for history's victims.