Into A Far Country

Before leaving Galway, I booked a flight on Aer Lingus to John F. Kennedy Airport in New York, from Shannon Airport near Limerick. I gave myself one night in Limerick and travelled there by bus.

I wanted a stopover at the Cliffs of Moher in County Clare and got one, but only for 40 minutes. On the way the bus passed through small towns and villages including Doolin which had been recommended to me and which looks interesting, but will have to wait for the next trip.

At the Cliffs I was able to check my bag at the tourist shop. The weather was terrific and I enjoyed my hurried visit but would have preferred to spend more time.

Travelling to the Cliffs by bus is a bit harrowing, as the roads are narrow and twisty. The driver is used to it and seems unfazed. After my 40 minute stopover I have a new driver named John for the rest of the way to Limerick. John lives in County Clare and I accidently wind him up by asking about a group of holiday homes in the area. This leads to a profane diatribe about the ridiculous prices paid for the houses in recent years, and resultant defaults, bank failures and  bailouts. John believes that Irish bankers are getting a free ride after plunging Ireland into economic crisis. He also thinks that America has been putting bankers in jail, while no Irish bankers are behind bars. I’m not sure he’s right about American bankers going to jail but I didn’t want to interrupt an entertaining rant. How much do you think that cottage is worth? he asks me. I don’t know, maybe 500,000 Euros? It sold for 800,000 Euros! Well, it is lovely I say, right there on the water. “It’s not that lovely!” John barks.

John’s anger at Irish bankers, politicians and developers is understandable. As Paul Krugman wrote last November:

The Irish story began with a genuine economic miracle. But eventually this gave way to a speculative frenzy driven by runaway banks and real estate developers, all in a cozy relationship with leading politicians. The frenzy was financed with huge borrowing on the part of Irish banks, largely from banks in other European nations.

Then the bubble burst, and those banks faced huge losses. You might have expected those who lent money to the banks to share in the losses. After all, they were consenting adults, and if they failed to understand the risks they were taking that was nobody’s fault but their own. But, no, the Irish government stepped in to guarantee the banks’ debt, turning private losses into public obligations.

Before the bank bust, Ireland had little public debt. But with taxpayers suddenly on the hook for gigantic bank losses, even as revenues plunged, the nation’s creditworthiness was put in doubt. So Ireland tried to reassure the markets with a harsh program of spending cuts.

Step back for a minute and think about that. These debts were incurred, not to pay for public programs, but by private wheeler-dealers seeking nothing but their own profit. Yet ordinary Irish citizens are now bearing the burden of those debts.

Remember Ireland is smaller than Denmark in terms of population, yet now bears the highest debt-to-GDP ratio in the world, with external debt per capita a staggering $535,529. Thankfully John is distracted by an acquaintance named Michael he picks up on the road to Limerick, and I am fascinated by the cadence of their conversation, although I can only understand a bit of it over the bus noise. They use each other’s first names in nearly every sentence during their back and forth.

On the walk from the bus station to my hotel Limerick looks especially hard hit by Ireland’s economic collapse, with many shops and restaurants shuttered. Despite deep spending cuts Ireland is being pressured to cut further, to reduce social welfare and benefits for the unemployed as a means of “incentivizing” them to return to work. As one commentator pointed out however, it makes no sense to talk about motivating the unemployed when there simply are no jobs.

The town itself is picturesque, and I enjoyed my evening walk along the “broad, majestic” River Shannon.