Facing up to the reality of an economic nightmare

By Fintan O’Toole (for the Irish Times)

The movie of the summer is Christopher Nolan’s Inception, which is about a man who can enter other people’s dreams. The labyrinthine plot leaves many people confused: are we back in reality, or is he still dreaming, or is he dreaming that he’s woken up, or is reality all a dream? And that’s where we are in Ireland now.

We know that, roughly from 2002 to 2008, we were in a long dream. We were in this weirdly hyper-real place, saturated with day-glo colours and animated by feverish distortions. In the way of dreams, contradictions simply coexisted. Everything was speeded up to a frantic and frenetic blur. But at the same time, things seemed to float around in a dazed weightlessness.

Patently absurd things - that suburban three-bedroom houses were worth a million euro, that you could have low taxes and excellent public services, that Fianna Fail might be dodgy but at least knew how to keep the economy going - seemed like common sense.

Strange characters popped out of nowhere and spoke in nonsensical non sequiturs: taxi drivers talking about buying villas in Bulgaria; economists babbling about the end of boom and bust.

And then we woke up. Like Pamela Ewing in Dallas , we opened our eyes and realised that the whole of the previous season of Irish history had been a dream and that actually we were still in the early 1990s. Like Pamela’s awakening, this twist in the plot was rather annoying for the viewers. It made us feel that the people behind the scenes were messing with our heads in order to disguise the fact that they had literally lost the plot.

But we were awake now and we had to rub the sleep from our eyes and look at our own sorry faces in the morning mirror. We had to shake from our minds those lingering vestiges of the dreamtime - the stray images of opulence that clung on until the sharp, bitter taste of black coffee brought us fully into the waking world. We let out a low, rueful laugh at the fragments of vanished fantasy that floated to the surface of memory. And we steeled ourselves to face into the daylight of a bloody awful reality - same as it ever was, the country going down the tubes.

But maybe we only dreamed that we woke up. Maybe the surreal self-delusion is continuing. Maybe, at least in official Ireland, all the buzz and bustle of hands-to-the-pumps activity is just rapid eye movement. Maybe, instead of facing reality, the great and the good have simply slipped from a blissful reverie into a febrile dream.

Maybe they’re not leading us out of the wilderness, but sleepwalking towards a cliff.

The old dream was that we were rich. The new, uneasy dream is . . . that we’re still rich. Rich enough, at least, to be able to afford to take on, not just a massive public debt, but a vast private banking debt as well. Rich enough to be able to service a real government debt that could, by the end of next year, be close to 200 billion euro - if we add the cost of the bank bailout to all the money the Government has to borrow to keep the show on the road.

What makes it seem probable that we’re still in dreamland is that nothing changes. In the real world, when things get worse and worse, people react. But in bad dreams, you have the sensation of being stuck. You run and run and get nowhere. The stairs just get longer and longer as you try to climb them to safety. And most of the Irish elite seems to be in this mode. They can’t move at all.

When the cost of the Government’s catastrophic decision to rescue Anglo Irish Bank was 4 billion euro, it was tough but manageable. When it was 10 billion euro, it was tough but manageable. When it was 22 euro billion, it was tough but manageable. And what will it be if the cost turns out to be 35 billion euro? Tough but manageable.

There is now a realistic chance that the cost of the bank bailout will be 50 billion euro - more than twice what it was when the great and the good decided we could just about afford it. At [euro]25 billion, the ESRI reckoned the bailout would cost us directly about 2 per cent of GNP every year for the foreseeable future. Does anyone actually believe that we can afford to spend 4 per cent of GNP a year for no economic return?

Even the Financial Times , not known for its adherence to communism, editorialised last Friday that it is “time to staunch the bleeding”.

The cost of pretending that we have the money to throw into this black hole will be the destruction of all sense of decency in our society. We’ve already lost this war - let’s stop throwing our last troops at the machine guns for the sake of an increasingly deluded sense of national pride. This time, let’s actually wake up.

Urgent Appeal