A television drama in the late 1960s remains fresh in the memory. An older man comes into a betting office. A couple of shillings in his pocket – it was pre-decimal days – he is looking for someone to lend him the eighteen shillings he needs with which to buy his grandson a train. He decides to place a bet on a horse, which wins; then the winnings are placed on another horse; and then the accumulated sum is placed as another bet. He continues the winning run, each time being exhorted not to place the full amount, until his winnings stand at £10,000, which he places on a dead cert, which loses, and every penny is gone. At the end the bookmaker offers him the eighteen shillings he needs to buy the train. It was a piece of adult drama that had a profound effect upon a childhood mind, for it is recalled again and again.
No-one would be stupid enough to lose everything in a single bet, would they?
The death of the French financier who lost over a billion dollars in the Bernard Madoff swindle is another sad episode in the story of a world that went mad; a world that believed its winning streak could not end.
This morning’s Financial Times reports on charity food handouts in Reykjavik. A country that had been consistently ranked by the United Nations as one of the best in the world in which to live, now has people queuing with tickets to received tinned food from a store. It seems unthinkable that such a proud and independent nation is now propped up by a $10 billion loan from the International Monetary Fund and burdened by interest rates of 18% , which are needed to defend its currency. How did Icelandic banks take billions in deposits to invest in the sort of assets that, in Britain the Archbishop of Canterbury described as ‘fairy gold’? Did they believe that they were betting on dead certs? Did they believe that gamble after gamble would pay off? Were they convinced that they could not lose?
Iceland lost its fortune betting on banking; Ireland lost its new found wealth betting on property. Half finished estates dot the country; half empty developments are mocked by the overblown descriptions on the billboards announcing properties for sale. Did even the bankers, and their paid economic experts who repeatedly declared in the media that ‘nothing could go wrong’, believe that the price curve could rise forever? Questions raised were treated as heresy; dissenting voices were described as people who knew nothing. It turned out that the ‘know nothings’ were working all along for the financial institutions.
Ireland has lost years of what might have been a good future in a single disastrous bet on the property market. Like the man who had come into the betting shop looking for eighteen shillings; there was not the wisdom to invest the money in different ways. In 2006, David McWilliams warned us on RTE television that apart from the growth in the property market, there was not a lot happening in the economy; but we carried on pouring money into bets on an old steeplechaser that finally came up against one fence too many.
There is a somber mood amongst many, but at least we can still afford a good Christmas; we have eighteen shillings without having to borrow it. The somberness comes from reflecting on what has been lost; what couldn’t we have done with all that money?
The one thing that remains recession-proof, that is still completely free, is going to church, perhaps the loss of the new Ireland will bring back elements of the old one.