Want to learn how to turn a first world economy into a third world economy? Embrace the FIRE (finance, insurance, real estate) economy.
Ireland was once known as one of Neoliberalism's few success stories, but as Michael Lewis points out in Vanity Fair a strong wind will blow away any house of cards:
The Irish budget deficit—which three years ago was a surplus—is now 32 percent of its G.D.P., the highest by far in the history of the Eurozone. One credit-analysis firm has judged Ireland the third-most-likely country to default. Not quite as risky for the global investor as Venezuela, but riskier than Iraq. Distinctly Third World, in any case.
FIRE can do more damage to your economy than a 'shock and awe' bombing barrage by the U.S military!
It seems many of the Irish Banksters played by Wall Street's book, claiming there would be a "soft landing" to the real estate bubble. Unfortunately that's not how the FIRE economy works:
...real-estate bubbles never end with soft landings. A bubble is inflated by nothing firmer than expectations. The moment people cease to believe that house prices will rise forever, they will notice what a terrible long-term investment real estate has become and flee the market, and the market will crash.
Though there does seem to be one difference between the U.S and Irish expierience:
In America the banks went down, but the big shots in them still got rich; in Ireland the big shots went down with the banks.
What many do not understand is, though always scheming innovating, the FIRE economy is older than Capitalism (at least industrial capitalism). The old term for it was usury and it was forbidden by nearly every major religion, especially the Abrahamic faiths (Judaism, Christianity, Islam) as an immoral activity, a crime against God's law.
This was because usury was and is considered a form of slavery and unjust enrichment, or what would today be called antisocial behavior. The users became people's masters - as FIRE is now Ireland's master:
Otherwise sound Irish borrowers had been rendered unsound by the size of the loans they had taken out to buy inflated Irish property. That had been the strangest consequence of the Irish bubble: to throw a nation which had finally clawed its way out of centuries of indentured servitude back into it.
Then comes the con:
The Irish banks, like the big American banks, managed to persuade a lot of people that they were so intertwined with their economy that their failure would bring down a lot of other things, too. But they weren’t, at least not all of them.
And the same result of that con in America:
People who had made a private bet that went bad, and didn’t expect to be repaid in full, were handed their money back—from the Irish taxpayer.
But guess who also played a role in raping the Irish people, our old parasite friends:
A political investigative blog called Guido Fawkes somehow obtained a list of the Anglo Irish foreign bondholders: German banks, French banks, German investment funds, Goldman Sachs. (Yes! Even the Irish did their bit for Goldman.)
Oh Goldman Sachs what moral/ethical/legal standards won't you subvert and usurp?
The FIRE economy is burning all over the world, from Ireland to Egypt to places unheard.
Burn baby burn.