The pot of confidence that was once overflowing in Ireland now seems to have been fully drained. When this pot was full, anything seemed possible, but the banking reports last week seem to have sucked the last drops out of the barrel.
The bursting of the property bubble has blown a hole in our national psyche, and it has left a very large, gaping wound. A lot of people now seem to be looking down and they see no bottom to the current economic scenario. It is as if they are looking into an abyss.
This is wrong. The media likes to wallow in the doom, but when has the media ever reflected the real world? The problems are large, but the opportunities are larger. We just need to recognise the new game and start to play it.
Things have clearly got bad in people's minds when Labour is the most popular political party in the state. I know Fianna Fáil is bad – and seems to be getting worse – but I am not sure we are ready to become a socialist state under Labour just yet.
"It's the economy, stupid," Bill Clinton once famously said, and moving to the left is not going to fix that. Hating the current government and voting for Labour are not the same thing.
I was abroad last week, and it is only from afar that you can get some perspective on the Irish problem. As I peered into the Irish goldfish bowl, I did not see a black hole. I certainly saw problems, mistakes, ineptitude and much more, but there are also a lot of positives. We are a creative and hard-working nation.
I found myself remembering the final scene from Monty Python's Life of Brian and the opening lines to the famous song. They are as good a message for life as you will ever find.
"Some things in life are bad,
They can really make you mad,
Other things just make you swear and curse.
When you're chewing on life's gristle
Don't grumble, give a whistle.
And this'll help things turn out for the best.
Always look on the bright side of life" (whistle)
So here it is, here is the bright side of life.
The ECB and the European Union will rescue Ireland at any cost. We are a very small country and the figures here are very small. Our banks will not be allowed to fail and our government will be provided with the finance to carry out the transition to a new, low-cost state. The government may not like Ryanair, but it is going to start looking a lot more like it to pay its bills and balance the books.
To fund the government deficit, taxes will have to rise again and spending will be cut, but this will not be the end of life as we know it. We will adjust to the new taxes because they are not really new. The old property taxes will be replaced with new income, carbon and asset taxes, and the books will balance at some point in the near future. Governments always have the power to tax and cut spending to balance the national accounts and this time will be no different. The economy will adjust to these new taxes, and it will merely bring us into line with our European peers. The government might even get marginally more efficient, which would be a nice bonus.
The banking crisis will roll on beyond Nama and there will be more pain to come for the banks and their customers in the future, but it will not be terminal. Again, our figures are small in a European context, and the ECB will fund the deficit in the banking system. Last week it extended its exceptional liquidity operations for the banks. This means European banks can borrow all the money they need from the ECB to fund their debt rollovers. In effect this is state debt, but the sovereign and the banking system are now fused together in most countries around the world. The state is the banking system, whether it likes it or not.
The money to fix this problem does not come from some mysterious vault in Frankfurt. It is merely generated on computer screens at the ECB; 93% of all money in the world is electronic so it is easy to add a few zeros to this. Central banks are very good at disguising this new money creation because the concept is too alien for the average citizen to comprehend. Money is created by the banking system and it will be the solution to this crisis. Inflation will be the result but growth will come first.
Exports, spending and growth will return very soon to Ireland and, on the back of this, our national income will rise. The weaker euro, and interest rates at 1%, are the key foundations to this new stage of growth.
I am involved in a business that exports to the USA and the UK and I can already see the benefit of the weak euro. Parity with the dollar should be our target here. At that level, it will be full steam ahead for us in the world market.
Interest rates of 1% are also key to this growth. I know Irish businesses cannot borrow, but our customers in the world market can, and they can use this borrowed money to invest and buy from Irish exporters. The benefit is not as direct but it is considerable.
This cocktail of weak currency and cheap money is potent and it is the engine for Ireland to move forward. Irish businessmen have already moved abroad to seek new markets and power this growth so the game is on.