Wreck of the Irish: What America Can Learn from Ireland's Meltdown

Article excerpt

COUNTY KILDARE--From Foreign Policy to CBS News, mainstream American voices are now speaking openly about the possibility that the country is headed for a long decline. Depressing though such a discussion might be, it's necessary. But equally important is the question of how a nation in the midst of catastrophe can rebuild.

For both of these purposes, it's useful to have a test case--a country culturally similar to America that has experienced a variation of our boom and bust. Take, for example, my adopted country of Ireland.

Ireland has long been famous for being poor and oppressed, from 1729's "A Modest Proposal" through the Famine and the Irish Revolution to 1995's Angela's Ashes. Tens of millions of Irish descendants around the world have felt sympathy for and solidarity with their distant cousins--their suffering gave us underdog status, a colorful past, and lent gravitas to our St. Patrick's Day celebrations.

But in Ireland itself these cultural symbols have been a lived reality. My wife's family remember a time when Ireland's per capita GDP was almost the lowest in the Western world, higher than Puerto Rico's but lower than Gabon's, and when not all their neighbors had electricity or indoor plumbing. The country produced one of the highest ratios of Nobel Prize winners per capita in the world, but social life remained parochial and Dickensian, "backward" by American standards. Divorce, for example, remained illegal until 1995. Ireland was an anomaly on the world stage, cosmopolitan but agrarian, a European Third World country.

Once a few computer companies began moving here in the early years of the Internet boom, however, the economy roared to life, overthrowing everyone's expectations. One by one, tech companies set up shop outside Dublin and Cork--Intel, Dell, IBM, Hewlett Packard, Microsoft--drawn by low corporate taxes, a convenient time zone, and an English-speaking workforce. In the space of just 10 years, a country smaller in size and population than South Carolina became, according to some estimates, the world's number one exporter of software.

As the "Celtic Tiger," Ireland rose from 22nd in per capita GDP to fourth place in international rankings. Unemployment fell from almost 20 percent to 4 percent, and by 2005 an Economist study ranked Ireland as the best place to live in the world. Tens of thousands of Irish emigrants returned home, and Eastern Europeans flooded in to fill service jobs until almost 10 percent of residents were foreign-born.

Inevitably, the country developed a new class of rich and stylish entrepreneurs with their own national business celebrities, fashion magazines, trendy watering holes, and conspicuous consumption. Ireland had arrived like Cinderella at the ball.

But most of the Irish I talk to have mixed feelings about the Celtic Tiger: no one regrets making more money, building new homes, or taking annual vacations. Some have misgivings about what the new stresses and two-salary households did to families, what the construction boom did to the landscape, or what greed did to this very traditional society.

The most common complaint, though, is that the ruling party, Fianna Fail--rhymes with "tall," but looks like a bad pun--squandered the boom years, failing to develop the country's infrastructure as Americans did during their postwar peak. In my Missouri hometown, I could walk to a two-story library and a public pool, both open 12 twelve hours a day, both built in the 1950s. Here the nearest library remains two small rooms alongside a gas station, the nearest public pool is small and far away, and both are open about 12 hours a week.

The boom that kicked off in the 1990s led to a real-estate bubble, and villages within commuting distance of cities quickly acquired acres of suburban developments, their populations as much as quadrupling in a decade. These towns and housing tracts rely on the same narrow, winding roads that have been in use for centuries. …