Ireland needs a dose of reality

Where am I living, Ireland or Ethiopia?

Actually, as officials from the International Monetary Fund and the European Union agree to inject this recently-rich country with more than $100 billion in emergency aid, it feels most like Neverland: a fantasy world overrun with boys who are determined never to grow up. But there could be a silver lining to the emerald isle's mortifying forfeiture of fiscal sovereignty, and a valuable silver lining indeed: it could force Ireland's leaders to lead.

Even now, with their public-approval rating circling the drain at 11 percent, Ireland's leaders seem more likely to spout shamrocks from their nostrils and break into a chorus of “Danny Boy” in Czech. Now that the Green Party, its partner in the governing coalition, has called for a (very) early election to be held in January, the ruling Fianna Fail party is clearly on the way out. Not so obvious is the appeal of anyone who's likely to be on the way in. So far, the opposition parties have consistently shown themselves to be far richer in bile than in brilliance.

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Happily, though, the foreign powers that hold the purse-strings have every right to talk sense into the deluded doyens of Dublin. Here's what they ought to say:

The first thing you need to cut is the crap. Stop pretending that this bailout isn't a bailout. Stop pretending that you are in a position to need a massive infusion of cash strictly because of the global economic meltdown, or your need to do your bit to protect the euro, or even the negative power of Ireland's own toxic banks, given that they have been nationalized, to pull the state down with them. Sure, those are all significant factors. But face the facts: During the boom years, when the Irish government — headed by many of the same individuals who are heading it now — could have seriously saved and invested, the Irish government made one short-sighted, self-serving choice after another. And it faced only the most marginal, politically minded protest from those in opposition. This crowd chose to see the property bubble as a giant gumball and kept blowing air into it until it popped. They chose to puff up the public sector. They chose to sustain unsustainable levels of social benefit, and to avoid the introduction of unpleasant but probably necessary taxes and fees. Unless the next government — whatever party dominates it — seriously addresses these failures, no bailout will succeed.

Re-imagine the public services as things that serve the public. As brutally detailed in the great new book “Wasters” by Shane Ross and Nick Webb, the Irish government has all too often treated such responsibilities as health, education and transport primarily as pacifiers for unions, employment programs for voters, and landing pads for underqualified, overpaid executives – and only incidentally as essential obligations to the Irish people. As a result, Ireland's public services have, by and large, hit the incompetence trifecta: They are richly funded, poorly run, and void of accountability. The good news is, when it comes to many such services — especially the not-lean-but-mean health-care bureaucracy — wise cuts at the administrative level should actually improve quality at the real-life delivery level for most citizens.

Scrap the anti-social partnership. Ireland's “social partnership” is a pact among the government, major private employment bodies, and public-sector unions. A short-term political fix meant to forestall labor unrest in the 1980's, this has become a long-term fiscal catastrophe. The problem largely emanates from the related process of “benchmarking,” whereby the pay of public-sector workers has been linked to that of their private-sector counterparts. In theory, just as pay increases were expected to flow in times of economic boom, decreases were to be expected in times of economic bust. In practice, public-sector unions have heartily resisted any downward adjustment in their deals, even as their private-sector counterparts queue for jobs at McDonald's. True, public-sector pay has now been cut by some 13 percent. This would be more impressive if the starting salary figures weren't higher than almost anywhere else in Europe; about 30 percent higher, for instance, than in Britain.

Your budget is audibly mooing with sacred cows. Slaughter them. Granted, the carnage would be amazing. The Irish public is rightly said to be bracing itself for the dreaded combination of benefit cuts and tax increases that is sure to riddle the imminent four-year budget plan.

But the killer is, many such adjustments could and should have been made in much softer times, when they would have been much less painful.

Just one example: Even this far into deep fiscal desperation, every Irish family — ultra-rich included — is entitled to a monthly stipend for each new child, from birth to eighteen years of age. As of December 2009, Ireland had just shaved this provision a little bit per family. What have they been waiting for? Scoop three in a triple-dip recession?

Your government itself is morbidly obese. Stop gorging right this minute.

When it comes to the self-indulgences of the Irish political class, it's hard to decide which are worse: the illicitly cribbed or the explicitly permitted. Each one of Ireland's 166 TD's, or parliamentarians, earns about one-quarter more in salary than his British counterpart, and enjoys a raft of perks and expense entitlements besides. In Britain last year, when members of parliament from both major parties were revealed to have billed the taxpayer for such items as ineligible second homes and ornamental duck-houses, the scandal rocked Westminster, cost numerous incumbents re-election, and arguably created the opening into which the Liberal Democrats waltzed into a coalition with the Tories. The same, and worse, shenanigans go on here all the time, and offenders almost never get publicly scolded, let alone sacked. This drives average folks crazy. Granted, reining in the excess of politicians would not close the budget gap or reassure world bond markets. But it would signal the Irish people that their representatives have returned from Mars, and that ought to count for something.

Ireland is not a monarchy, so lose the deference to inherited power.

No question, all democratic countries have their political dynasties, the Kennedys and Bushes being but two. Nor does inheritance automatically equal incompetence; in fact, one of the most dynastically pedigreed Irish politicians — believe it or not, finance minister Brian Lenihan — is also among the most respected. Still, it is striking to note that the prime minister, his deputy, the finance minister and the leader of the opposition — to name a few — all followed their families into politics. Well over one-quarter of Ireland's parliamentarians are sons or daughters of previous parliamentarians – and that's not counting the greater web of families and friends that is spun between government and the entities that deal with government. To note this general pattern is to get some hint of why old but outrageous practices continue, unchallenged by either major party, while anything remotely fresh — ideas, perspectives, blood — is viewed like an unattended, faintly ticking bag at the airport, to be defused and removed from the scene. After all, who wants to rock the boat in which he was born?

It gives me no pleasure to bash the political brains of a country that is both my ancestral homeland and my adopted home. Nor am I under any illusion that similarly scathing criticisms couldn't be hurled at many other nations, including the United States. But the reality here is the reality here: Ireland has fallen so far, so fast. If its leaders keep kidding themselves about why, it will never rise again.