Consumers: set on road to ruin, now hitting the road to newry

The consumer – known as the citizen in the days before prosperity turned society into an economy – has returned from the never-never with a crash. A decade-long splurge of credit card-funded weekend breaks in Prague, trophy cars and second homes came screeching to a halt last autumn.

Some say it is entirely the consumer's own fault for borrowing recklessly and chasing the dream without a conscience, but history says otherwise. Foolish it may have been to embark on 100% mortgages for crazily-priced commuter houses, but that is precisely what the establishment encouraged.

It has already been air-brushed from accounts of recent events that not everybody benefited from the boom. In fact, the gap between rich and poor widened to one of the worst in the world. When hard-pressed consumers complained about prices, the then minister for enterprise advised us to shop around for value.

Now the minister for finance treats anyone who shops over the border as a parsimonious anti-patriot bent on destroying Ireland Inc. His budget increase in the VAT rate and the near-parity of sterling with the euro have added to the allure of Newry and Enniskillen. Multiples in the Republic continue to rip their customers off with unjustifiable price differences. The miracle is that anybody still darkens their doors.

Last week's announcement of 400 job cuts by Superquinn was a measure of how consumers are voting with their feet. Not only are they trotting over the border to make their purchases, but even those staying in this jurisdiction are gravitating to the better value offered by Lidl and Aldi. Abandoned, shuttered shops dominate in the iconography of the recession, which first became manifest with the closure of Habitat in Dublin. Surely it is counter-productive for the European Central Bank to cut interest rates in an attempt to resuscitate spending when our own government slaps another half-percent onto VAT and fails to control energy prices.

But consumer confidence has not vanished completely. Ikea is opening in Ballymun, Dublin, in July, John Lewis is setting up shop in the capital's O'Connell Street and the five-star Merrion Hotel is planning a huge expansion. Instead of deploring shoppers who shop around for value, the government should be rewarding them for their irrepressible optimism – although that too will probably evaporate when the spring stock arrives and the "70% slashed" signs disappear from the windows.

Bankers and Builders: The b-words have the nation over a barrel

At a corporate function groaning with self-important suits in the Royal College of Surgeons during the height of the boom, AIB chairman Dermot Gleeson, as guest of honour, vented his spleen with oratorical passion about the "over-regulation" of Irish banking. His audience comprised a who's-who of the nation's most celebrated builders and bankers. Their faces, familiar from remorseless media accounts of their swashbuckling deal-making, nearly burst with the aggrieved fellow-feeling of victims, one and all.

We now know what balderdash that was. Builders and bankers have become the two biggest B-words in post-boom Ireland. Half the people there that night, the builders, were crying into their Bollinger under cover of the Fianna Fáil tent, while the other half, the bankers, were kissing the builders' feet and stuffing blank cheques into their pockets.

This was what the ruling class likes to describe as principles-led banking, as opposed to laws that must be obeyed. Ordinary citizens run the risk of jail if, for instance, they hide their television sets from the tv licence inspector, but bankers enjoy immunity even when they hide, say, €129m worth of loans from the authorities.

Economic recessions demand a bad guy who can be blamed for all ills and Seán(ie) FitzPatrick, the ex-chairman of Anglo Irish Bank, is officially the most reviled man in Ireland. The minister for finance blames him for the nationalisation of his bank, at a cost of €5,000 to every man, woman and child in the state. Condemnation by overseas financial experts of Ireland's unregulated banking sector – the "wild west", as one underwhelmed German described Dublin's IFSC – goes ignored by Merrion Street as it points the baying mob towards FitzPatrick.

Our principles-led banking system – at a time when the only recognisable principle was that no amount of profit was ever enough – was predicated on a barmy assumption that bankers and builders were the nation's supreme patriots because they "took risks" for Ireland. The government consistently conjured up inducements for the citizens to buy houses for the benefit of the builders.

If the recession has illustrated one native peculiarity, it is our warped understanding of patriotism. While the little people are being emotionally flogged with the green flag, the bankers and builders nursed their imagined grievances and sank their billions into tasty investments in Britain, eastern Europe, the Middle East, the Far East and anywhere in the world but home. We learned last week that most of Anglo Irish Bank's money went to foreign investors.

Despite all this, the two Bs still have the nation over a barrel. If Anglo Irish crashes, it will bring down some of the country's erstwhile richest developers and speculators, who also have gargantuan loans with AIB and Bank of Ireland. And so the credo persists that bankers and builders must be rescued in the interests of the state.

The only way this could be made any way palatable to the rest of the citizenry would be if lessons had been demonstrably learned on high. The omens are not good. After he announced his intention to nationalise Anglo, minister Lenihan was asked on Morning Ireland if Seán FitzPatrick had repaid his loans. He said he didn't know. He then reprimanded the interviewer for asking questions that would "damage Ireland". While the public service is being demonised, the special relationship between our rulers and our builders and bankers lives on, cocooned in their world of implicit mutual trust.

Economists: The new celebrities, despised by Official Ireland

Government: not enough shoulders to the wheel

As if the recession and the weather weren't bad enough, academic economists are the new celebrities, though it's hard to understand why. Most economists failed to foresee the advent of the Celtic Tiger and most of them failed to predict its demise, which makes it somewhat difficult to trust them to steer us out of the mess.

If the plunge of the last six months has proved anything, it is that economism is an inexact science, and that scares the living daylights out of the rest of us. Sensationalist talk of daily carnage on the markets and economic apocalypse strikes such terror you wonder what is the worst that can possibly happen. If predicting a recession is beyond most economists, forecasting war and pestilence also exceed the remit. What distinguishes the good performers from the others is their accuracy.

Ireland has a dysfunctional relationship with the world of economists. Historically, our leaders have had little faith in them, as the ESRI has learned from experience. The generally respected think-tank warned the Department of Finance years ago of the folly of its prodigality during the good times but the warnings fell on deaf ears.

Former finance minister Charlie McCreevy's famous attack on "pinko liberals" was seen by many as a rejection of ESRI party-poopers. It was later followed by former taoiseach Bertie Ahern's suggestion that those predicting an economic downturn should commit suicide. As an independent body, the ESRI is regarded as a pesky upstart.

Unlike civil services in other countries which employ dozens of full-time economists, Ireland has a grand total of two, according to one source. That might explain why the department's figures consistently underestimated budget surpluses during the good times and, of late, have lethally underestimated our deficits.

Official Ireland, though, is out of step with the people (what's new?) who embrace the likes of David McWilliams as a user-friendly guru. The father of Breakfast Roll Man (the same chap who swung the 2007 general election!), even enjoyed a moment last autumn when his fans suspected he was directing the government's strategy with the bank guarantee scheme. Apart from the recession itself, Williams is credited with making the business pages sexy reading for the ordinary Joe, or should that be Decklanders?

Of all the economists, Rossa White of Davy Stockbrokers was the one who came closest to calling events most accurately and his profile (in this parish too) has risen exponentially. The media, however, has turned more and more to academia for analysis, and away from the corporate sectors of banks and stockbrokers where commercial agendas might intrude. Dan McLaughlin of Bank of Ireland, the poster boy of the boom until his faux pas over Irish Ferries, has drifted off the radar in recent months while Alan Ahearne of NUI Galway gains more and more kudos. His early analysis of the damage caused to the economy by the construction sector has proved absolutely correct.

UCD's Morgan Kelly has benefited too from the limelight, emerging as a very blunt-speaking expert. His bluntness in an Irish Times column last week, however, culminating in a lengthy correction and clarification, makes it unlikely that he will be writing for the paper again any time soon.

On the basis that, if they can exploit the current conditions for their own enrichment, they must be good, Marc Coleman takes the prize for sheer enterprise. Newstalk's economics editor has taken to advertising his services as a conference speaker, citing endorsements by various business leaders. He remains undeterred by the tittering prompted by the title of his book published last year on the economy, The Best is Yet to Come, which argued that the miracle of the boom was far from over. By the way, it costs €15.

Government, what government? Political wisdom has it that the effective executive has been reduced from 15 to a troika consisting of the two Brians – Cowen and Lenihan – and tánaiste Mary Coughlan.

There are reports of irritable ministers, who have been in power for over a decade and now find themselves left out in the cold when big decisions are made.

Certainly there appear to be fewer shoulders to the wheel. Last week, as the markets slashed and burned the Irish banks, two junior ministers were sent out to bat on Morning Ireland. Whether because of pique or caution, the old hands appear to be running for cover.

To be fair to Cowen, governing has been all about crisis management since he became taoiseach. The evolving crisis has tested the best of world leaders, and it remains to be seen how Barack Obama handles his end of things.

Elsewhere, the crisis has been the making of leaders. When Cowen was elected, Gordon Brown looked finished. No more. The trajectory of Cowen's stock has been in the opposite direction.

Injecting the type of stimulus that is popular in other countries would be difficult due to the depleted state of the national coffers. That is due in large measure to the collapse of the property bubble. Cowen did nothing to constrain the dependence on property when he was finance minister. To acknowledge the extent of the problem now would be to admit he had a hand in creating it. For a politician already rendered insecure by everything from the Lisbon referendum result to reaction to the budget to the collapse of the economy, that would require a deep well of courage.

But he has to start somewhere. Whatever about his record on decisions, the biggest problem is the perception that he is floundering. Perception is reality in politics. He needs to begin communicating properly in plain English and doing so with confidence and vigour if he is to survive and prosper in the job.

Finance minister Brian Lenihan appears to have fared somewhat better. From a legal background, he had to grasp the intricate detail of banking and world economics quickly. His decisions are open to question, but practically everybody is groping in the dark at the moment. In the media at least, he comes across as having a firm grasp on what is going on.

The Greens may turn out to be the big losers of the current crisis. Entering government for the first time, their two ministers have acquitted themselves well, but the party may well join others that found that their dance in government with Fianna Fáil left them waltzing all the way to the graveyard.

Media: Determined not to be fooled again

The biblical image of the grim reaper going house to house with his scythe is upon us. Except in this age, the reaper goes by another name and has a different modus operandi. He is Dr Death and each evening he beams into homes across the land.

Grown men and women weep when his grim face hovers into view. Children flee from the room, promising to forsake television for the remainder of childhood. He's here again, the man with the future in his eyes, and it's all doom and gloom. He bears the horror. He is the horror.

George Lee isn't that bad, but sometimes it feels as if he is. The man is only doing his job, of which he's well capable, but what gets under the skin of viewers is that he appears to be enjoying it.

His eyes sparkle with the latest missive from the enveloping gloom. At times, his delivery threatens to lapse into breathlessness. He revels in the messenger being the message.

Of course, he did tell us this was coming. Lee and a few others had been predicting for a long time what was on the way. Their voices were drowned out by wishful thinking of the masses and brow-beating from vested interests. We were told there was a danger of talking down the economy. Many of us in the media, unversed in high economics and susceptible to the same longings as the general public, bought into this waffle.

Two years ago, journalist Richard Curran produced a programme Future Shock which predicted the end of the boom. In the fleeting concern that followed, Bertie Ahern said doomsayers would be better off committing suicide.

Elsewhere, print and the airwaves were filled with economists working for banks, who told us everything was just fine.

One criticism that can be levelled at the media is that the musings of these economists are still not accompanied by a health warning to the effect that they may be talking on behalf of a large vested interest.

This time around, the media is determined it won't get fooled again.

The other impact of the media is the portrayal in some quarters of Brian Cowen. Robbed of the drama of a contest for party leader last year, the narrative was readjusted to accommodate the coronation of a country chieftain.

His ascension was accompanied by coverage about his mythical powers and political nous, for which there was precious little concrete evidence in his record. Then, he turned out to be human, flawed and apparently stubborn, none of which should have surprised anybody.

He has been properly criticised for deficiencies in his leadership throughout the economic crisis. But of late criticism in some quarters has turned ridiculous and offensive, referring to his weight and recommending that he get fit and join a gym. You'd swear the media itself was top-heavy with Charles Atlas clones, obsessed with clean living and, check this out, wellness. It's not. And Cowen shouldn't be ridiculed in that manner under the guise of fair criticism.

The Opposition: It's easy to be the messiah

As a nation, we're accumulating exchequer liabilities at a frightening rate, what with guaranteeing and nationalising banks, losing 5,000 jobs a month, having nowhere to emigrate to because everybody else is up the Swanee too, and no munificent multinationals to create employment here. Any parliamentary opposition that fails to turn itself into the messiah in these abysmal times would have to take a long, hard look at itself.

Let's start with Enda Kenny. Fine Gael has taken the lead in the polls but the party leader's personal popularity lags well behind it. Why? Because the party's fortunes spring from two sources – the deepening recession and the growing impressiveness of finance spokesman Richard Bruton – while Kenny continues to be perceived as devoid of authority.

Begging your pardon, but at this juncture we must resort to one of the most cringe-making clichés in politics. We get the politicians we deserve. Two decades ago, under Alan Dukes (whose subsequent resignation triggered Fine Gael's recidivist leadership switches), the Tallaght Strategy was born, whereby the main opposition party pledged to support the Fianna Fáil government's remedial economic measures.

Some say that magnanimous gesture sowed the seeds of the Celtic Tiger. What it didn't do was get Fine Gael elected to government the next time out, sending a clear message that there is no percentage to be eked from patriotic sacrifice.

Kenny has been accused of quite the opposite by today's government, as his judgement that the cabinet is incapable of managing the recession gets ventilated far beyond these shores.

The laws of political gravity rule that any opposition whose thinking does not differ fundamentally from the government's can only resort to personality politics. But dissing the taoiseach wins few admirers when national confidence is in a death vortex and the citizens are terrified of the exchequer going bust.

Eamonn Gilmore, on the other hand, conscientiously prefaces his harsher criticisms with the disclaimer that, were it not for the national interest, he would say what he really felt. That tact, along with Labour's attempt at offering solutions (bitty as they are), has helped make him the country's most popular leader.

But is Gilmore getting cocky? Calling for a general election and projecting himself as a future taoiseach smacks of confidence that the circumstances hardly justify.

Gilmore and his deputy Joan Burton are providing the Dáil's most challenging opposition. The problem for them is that opposition is exactly where the voters want them to stay.

The Social Partners: Ruling with self-interest for far too long

A charge that has been levelled at Fianna Fáil since the walls came tumbling down is that the party has been too long in power. It is no longer in touch with the hopes and concerns of Everyman. It is a busted flush.

If there is any validity in this claim, then it applies tenfold to the social partners. Fianna Fáil has been in power for only 11 years. The social partners have been governing for 22 long years and counting.

The dominant forces in the social partners are the Irish Congress of Trade Unions (ICTU) and the Irish Business and Employers Federation (Ibec). Both are showing signs of the staleness that comes with ruling for too long. While their ruling partner from electoral politics, Brian Lenihan, is calling for patriotism, ICTU and Ibec can't get away from the concept of self-interest and control.

For the past six months, Ibec directors like Turlough O'Sullivan have been beating the same drum. The public service must be reformed, wages have to be slashed, numbers cut and the assorted dossers put on the dole.

These calls have been so unrelenting that they have given the impression that the state of the public service is the reason the country totters on the brink. Strangely enough, O'Sullivan never refers to one of the principal culprits in delivering us to this station. Strangely enough, the biggest financial backers of Ibec are the main banks.

O'Sullivan and his fellow well-padded directors are adamant that the focus of our problems is the public service, both in terms of cost and operation. Never in their regular media appearances do they cite the reckless management of banks as a serious concern that must be addressed if we are to survive. Instead, they see the economic threat as an opportunity to knock stripes off Ibec's perennial bugbear, the public service.

The Ibec honchos don't see pay cuts as something that should infect their own august institution. While they bleat that guards, teachers and nurses should have their wages slashed, they cling for dear life to their own remuneration. Some of them are pulling in over €200,000 a year, a multiple of what is earned by their targets.

On the other side of the fence, the trade unions are also circling the wagons. The decline of union membership in the private sector over the last 15 years means the unions' power largely rests in the public service.

In tough times like these, their resolve is tested. The unions were the main drivers behind benchmarking, which raised pay levels considerably in the public service. However, what's sauce for the goose in good times is not sauce for the gander when the going is soft.

Despite the carnage in the private sector, ICTU chief David Begg is adamant there will be no pay cuts, even for those at the higher end of the scale. He makes constant references to "working people". His own salary is pegged at that of assistant secretary in the public service who earn around €130,000 to €140,000 a year – several times more than ordinary workers earn. If earners on that level aren't expected to ship some pain, the inevitability is that those at the bottom will feel the worst of it again.

Begg's stated reason for excluding pay cuts from any agenda is the horrendous implications such a move would have for the economy. The stewardship of the economy is a matter for elected politicians, not the unions. There may be a good case for desisting from pay cuts, but the one being put forward by Begg and his colleagues show how deeply embedded in power these unelected bodies are.