“History doesn’t repeat itself, but it does rhyme.” – Mark Twain
The story has become the stuff of legend.
Years ago, an informal group of free-market oriented civil servants, politicians, economists,
and “in the know” media types,
gathered periodically for beery conversation at the Dublin pub of Doheny & Nesbitts.
Acquiring power and influence,
they induced Ireland to accept the modern elixir of Neoliberalism.
Taxes on corporations and incomes were lowered (even as more regressive forms of taxation were enhanced),
privatization was embraced,
financial markets deregulated,
import duties reduced,
and the nation adopted a fixed exchange rate (the Euro) to enhance the flow of foreign investment.
European money poured into the country,
real estate prices and stock market quotations took off,
and Irish banks booked profits on their increasingly leveraged portfolio of commercial and mortgage loans.
Although the banks were deregulated and largely unsupervised, few evinced concern.
After all,
did not the flow of funds from banks across Europe represent an endorsement of Irish banking policies and practices?
Besides,
didn’t Alan Greenspan and Lawrence Summers point out that financial markets are self-supervising and self-regulating?