MAEV ANN WREN, 1989: A BOOM THAT’S NOT GOOD FOR THE ECONOMY
Oct 17th, 2010 by Conor McCabe
There are very few shining lights in Irish journalism, especially when it comes to property and the housing market. Most of them acted as cheerleaders for the boom, with Brendan O’Connor’s “Smart Ballsy Guys” typical of the shameless approach undertaken by the newspapers.
This is not a recent phenomenon by any means. The Irish Times, for example, has been talking up the property market for decades.
But one of the few journalists who bucked this trend, and who did it wonderfully, is Maev Ann Wren.
Her articles on property and the economics of property speculation are miles ahead of anything else which shows up in the archives.
Here’s one I came across tonight. It’s great because it points out in a very clear and simple way the dangers facing an economy which invests in property speculation instead of actual productive activity.
It also shows us that in terms of a timeline for the present crisis, the reintroduction of Section 23 tax incentives in Ray McSharry’s 1988 budget is one of the bookends in the present collapse of the Irish economy.
The expansion of these incentives under Charlie McCreevy’s term as Minister for Finance led to this, of course.
Anyway, have a read of Maev Ann Wren’s piece. It’s from 17 May1989. It’s great stuff.
Part one
Part two
Part three
Part four
Part five
The promotion of home ownership also has an aim like that of Gladstone in giving land to the peasantry - creating a conservative layer.
Would be useful to know figures for history of state provision of social housing, if anyone is aware of these.
The mushrooming of personal debt was a mass swindle perpetrated on the house purchasers. Of course a certain cute layer among the middle class played the system and cashed in hundeds of thousands if not millions; and others just saw themselves as fortunate and simply traded down.
But the main outcome was an immense transfer of wealth from the poorer to the wealthy, by inflating prices.
Those gangster that happened to be caught with outstanding multi-muillion loans knew full well the state would take care of them. While the ordianry person with a mortgage, credit card or bank loan debt has to cough up - having paid well, well over the odds for the essentials of life (which did include a two week break to some sunshine and away from the stresses of the ‘boom,’, cynically rubbished by newspaper pundits as ’splashing out’ ‘How dare they!’). The boom was racket.
A great article - one woman well ahead of the game. The only thing she didn’t quite anticipate is that our insane government would actually go on to incentivise the building of 100s of thousands of brand new houses which it knew there was no demand for. All just a matter of finding ways to give taxpayers money to party donor property developers.
[…] May 1989 the journalist Maev Ann Wren argued that ‘the flow of money into house purchase may be limiting funds for other more productive […]
” the flow of money into house purchase may be limiting funds for more productive purposes”
absolutely spot on. What a great article.
Mervyn, surely the transfer of wealth was intergenerational as well? The young paying their elders over the odds for their properties - something which happens in every generation sadly, although a property boom exaggerates the wealth transfer. Although, it must be added that nobody forced anyone to buy a house, particularly when the prices were absurdly high.
I agree that the biggest scandal is “those gangster that happened to be caught with outstanding multi-muillion loans knew full well the state would take care of them”. I would love to see some proper media coverage of how these guys have done out of the bailouts.