An Irishman's Diary

No matter how desperate you were to emigrate, would anyone have been doing you a favour by giving you free tickets on the Titanic…

No matter how desperate you were to emigrate, would anyone have been doing you a favour by giving you free tickets on the Titanic? The one certain outcome of being a steerage passenger in the Titanic proved to be an icy death; and the brief illusion of a comfortable future would hardly have been compensation in advance for that terrible end.

The Irish property market is like the Titanic; and even as we heave within binocular range of the ice-mountain, the Government is promising to give cheap seats in steerage to the poor who might not otherwise be aboard this doomed vessel. That, in effect, is what the promise to give cheap mortgages to the lowly paid will mean. They are being assisted to enter the property market just as that market is approaching inevitable disaster; and however uncomfortable that disaster will be for the fools who have overpaid to live in Dalkey or on Ailesbury Road, they are probably not such complete fools as to have neglected to put something by to bribe their way onto whatever economic lifeboats will be circling the wreck.

Government bribes

But those unfortunate low-earners duped by Government bribes into entering the property market now, just as it approaches its peak, will have nothing put by. Their economic station is a guarantee of that. So, regardless of the low interest rates the Government promises to offer to such people - how this process is to be policed to prevent that cheap money leaching into the general money markets is another question, of course - the certain consequence is that, in a year's time, they will be repaying the mortgage on properties which will have cost them an arm and leg, a liver and a kidney more to buy than they will then be worth.

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The dread words: negative equity. In the idiot-land of Celtic Tigerdom, in which boastfulness is seen as thought and nail-varnish has displaced the ennui of analysis, they are words we do not dare to speak, rather as men frequenting those peculiar bath-houses in New York 18 years ago refrained from mentioning the A-acronym. With verbal swagger and varnished cuticles, we are blindly denying the certainty of a downturn in the property market. House prices as multiples of average income simply cannot keep rising as they have been.

Even if all the cheap or even free money pouring into Ireland as EU grant or US investment were to continue, it still couldn't keep the current boom going. Here is the news. It will not continue. The American economy - the last man standing, as Alan Greenspan describes it - is slowing down; and we are its European appendix. Moreover, we know the taking-days of EU membership are over, and the donor-days are here. In other words, the iceberg.

Focused backwards

Now the Titanic analogy, to be sure, is a cliche; but cliches become cliches because they are metaphorically efficient. Technology made the Titanic possible, as it has made our economic boom possible. Hubris propelled the Titanic at full steam into a known ice-field; the hubris of being good Europeans caused us to surrender power over the engine-room of our currency to the Eurobank. Hubris is now causing us even to deny the existence of the ice-field. The watch of the Titanic gazing forward could have spotted the iceberg, but he'd mislaid his binoculars. We have our binoculars all right, but they are focused backwards, on the 1980s, and Dublin Castle.

We have low interest rates because they are good for a European mainland in recession. They are not good for us. What we need now is expensive money, to curb the insane rush among hard-working, working-class people to buy properties which will soon collapse in value. But, unable to prevent this folly happening, the Government is doing quite the reverse, piously stimulating the stampede up the gangways into the steerage section of the property-owning classes, where, after we've hit the iceberg, they'll be battened down even as the toffs in Dublin 4 are ushered into lifeboats, champagne still in hand.

Rented houses

At a time of collapsing property values, the hitherto hapless people living in the rented market should really become beneficiaries; as land and house values imitate dropped bricks, rents decrease, thereby making such people relatively better off. But with this Government measure, they'll have been lured into a rendezvous with icy-cold waters in those remote and shop-less asteroid-belt estates where houses are already vastly overpriced, and where true catastrophe looms.

We have had much pious froth recently about debt cancellation for delinquent states run by idiots or socio-paths. If nothing else, that should help us focus on the awesome reality of what happens when debts run out of control, still accumulating as the assets against which they are held plummet in value. That is the economic prison from which for many there will be no escape; they'll spend the next decade or more as wage-slaves of the banks and building societies, and at the end of their economic servitude, they will own sub-suburban property worth thousands less than they paid - and toiled - for it.

Look: can you see something?

Certainly not. I'm too busy enjoying myself.