As Fintan O’Toole mentioned in the media bite interview RTE is the only Irish media organization that isn’t reliant on ad revenue from those involved in the property market (although there are loads of ads for banks, and of course Eddie Hobbs plugging Brendan Investments). This was mentioned in the context of the reaction (in Independent News and Media portals mainly) to their Future Shock program on the property market a while ago. They also did a recent Prime Time program on the relationship between the property market and local councils, which was followed up on Questions and Answers.

But still, you are right. There is a reluctance to look beyond the surface of these things and to try and understand why such a bubble was allowed to develop in the first place. RTE also had loads of property programs on the go at the same time, with their resident estate agents describing a slump in the housing market as ‘a buyers market’, while producing elaborate make over programs that could only encourage people to spend lavishly on their new Commuter Belt homes. As if Manhattan chic or art-deco design compensates for the two hour daily commute. Also, people pay for such things by re-mortgaging their houses in their effort to live the life they are told they should be living while money is still relatively ‘cheap’. While personal indebtedness has started to slow down slightly it clear that it was boosted for so long not by an expansion in the overall economy but by the relative price of property. Once that price begins to fall consumer spending will drop also.

But the reality is that most people haven’t benefited from the so called Celtic Tiger. As the economy cools down they are going to find very few real gains despite the hype. Reading the predictions in the papers today, provided by lobbies such as the Small Firms Association or IBEC, the talk was positive despite the rumblings of economic meltdown. However, what was paramount was the need to reduce labour costs. These people never miss a trick.

Apart from the serious negative consequences of having all our eggs in one basket, and the opportunity cost of not investing in startups or industry, and the negative consequences of the political weight of a preponderant lobby like construction and the huge ties it has with political parties, there is another cost to this bubble. And it’s the pain that comes with the clap that follows such an outrageously inflated market. As in most cases, those who suffer most will be at the bottom of the heap - those who lose their jobs over the next couple of years in (probably) substantial numbers.

I heard people quip that the poles and others will simply return home. First, we don’t know if they will, or how many will. And anyway, why is it ok for an immigrant to lose his or her job. (It might be especially devastating for an immigrant - they may have to, and not just chose to, return home, after upping sticks and taking family and all to Ireland). But besides, the cheap ‘poles can go home’ comment (which I heard today at lunchtime) is wide of the mark. The vast bulk of people who are employed in construction and dependant industries are Irish. If a swift contraction does take place, it will be devastating for many. Think of those in their early 50s say, employed with CRH - as truck drivers, machinists, mechanics. Where do they go when they are out of work? Answer: nowhere. And think of this on a huge scale from Woodies employees, to plumbers, to painters and so on. True, some among these groups done well during the boom, but for many of the ‘ordinary workers’, it was merely a time when perhaps pay was good and work consistent. Now they will lose that and perhaps end on the dole queues. Meanwhile those who creamed off the real money will see smaller numbers passing through their books, but they will hardly face hardship. As always, the ordinary man pays the real price.

Celtic Tiger II: The Sequel

In February 2004, The Sunday Independent reported that Dan McLaughlin was the toast of the Society of Chartered Surveyors annual dinner at the Burlington Hotel: In a virtuoso performance, he declared that this country is currently enjoying an unprecedented “Golden Age of Construction” and - to thunderous applause - announced that “the Celtic Tiger is Back”.

If the definition of an optimist is one who sees the bottle half full and a pessimist says it’s half empty, the BofI economic guru left his audience of 1,300 property professionals in no doubt where he stands. “The economy in general has emerged from a period of sub-trend growth in remarkably rude health and is poised to enjoy a much more favourable global backdrop, which will propel Irish growth towards the potential of 6% over the next eighteen months,” Dr McLaughlin opined.

And so it transpired!

However, during the Sequel, construction became even more dominant in the Irish economy than in the late 1990’s when the total employed in the sector jumped from 126,100 in early 1998 to 281,000 in late 2006.

We have become even more dependent on foreign direct investment (FDI) today than we were a decade ago but having lost competitiveness, at a time when competition for mobile investment has increased.

Slogans about creating a knowledge economy when venture capital investment in Irish business continues at a pathetic level compared with investment in overseas commercial property, is hardly a harbinger of a sustainable future, when the equivalent of the oil wells - construction - run dry.