Friday 24 November 2017

History could repeat itself if we let property be the dynamo that drives economy again

NAMA Chairman Frank Daly, left, and Finance Minister Michael Noonan. Tom Burke
NAMA Chairman Frank Daly, left, and Finance Minister Michael Noonan. Tom Burke

Two years ago, being a mortgage broker was a bit like being an umbrella salesman in a drought. Now parts of the country are being treated to the spectacle of queues for house viewings, and the brokers, auctioneers, and solicitors are back. How did this happen, and is it a good thing?

At one stage, not long ago, the national business model was to sell bits of the country to one another using cash our banks borrowed from abroad. The approach essentially transferred an enormous amount of cash from the younger members of Irish society to older members of the rest of the world.

When the business model blew up like a mountain goat on a StairMaster, the taxpayer stepped in to socialise almost all of the losses, bailing out Irish depositors, Irish risk takers and international creditors while keeping the ECB happy. The total cost won't be known for a generation but it is clear Ireland has lost a decade of development at least.

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