How the Luck of the Irish Ran Out (or Was Given Away?)

In a recent issue of Vanity Fair (of all places),  Michael Lewis (of Moneyball, the Blind Side, and The Big Short fame) describes the rise and fall of the economy of Ireland.  He highlights several major policy mistakes made by those in power for which they were soundly thrashed in the Irish election yesterday.  Lewis’s article details the long list of major errors and thus the deep hole that these policies have made for the Irish people.  You should not be surprised to learn that the main problematic actions were:

1.  Huge lending by Irish banks for the vast expansion of housing and commercial activity

2. Massive foreign borrowing by these banks from other European investors

3. Government guarantee of payment on all the loans made by the Irish banks and thus for the ultimate European bondholders.

This toxic mix will require an incredible commitment of annual revenue (read taxes on the Irish.)  It was inevitable for this house of cards to fall.  How many other “houses of cards” will follow suit?  Put differently, why wasn’t Lewis’s article published in a more widely read and pertinent journal.