OLD LESSONS OF THE NEW IRISH PROBLEM

This image from the Wikipedia Media Commons depicts the "Famine" sculpture in front of Dublin's financial centre.

Created at the height of the credit boom, when Dublin was amongst the four richest cities in the world, this artwork now symbolises the "feast to famine" cycle of the modern Irish economy.

For some, last week's Irish Government bailout of the banking sector may recall the country's earlier potato famine, but the lessons are much closer to home.

In short, "The New Irish Problem" - as I'm going to call it - shows the folly of a small country adopting the "growth policies" of a much larger one, namely the United States.

For in Ireland, the problems of an overly large and inadequately regulated financial sector as well as a highly speculative property market - problems which the country shares with the United Kingdom - have been made far worse by a lax planning regime and lending to the construction sector, mixed up with some good old fashioned corruption.

UK Coalition Government and "Next Generation Labour" please take note !

For if the previous administration had succeeded in fully implementing its plans for massive volume house-building, the outcome would almost certainly have been akin to the property market collapses in the US, Ireland and Spain, which followed similar policies.