Last Friday’s 9.55am train from Limerick pulled out on time, hurtling towards the ‘Junction’. As we sped past the waterlogged land on a beautiful morning, commuters on the train were going about their business as normal, reading about the treacherous Thierry Henry in the paper and chatting to friends on the phone.
As we arrived at Limerick Junction – a bleak enough place which hasn’t changed an iota since the early 1980s – a talkative grandmother cornered me to discuss the ‘‘situation’’. I regretted having the last pint in Limerick’s wonderful White House the night before. It probably wasn’t absolutely necessary.
The Cork train arrived just in time and I settled in, gazing out the window and thinking about how normal the country seemed, even though we are nearly bankrupt. Is this how it will be? Will we meander on as if nothing is happening, until we wake up and realise that the credit taps have been turned off?
When you look for real signs of the massive fall in our income, when you look for signs of the â‚¬20 billion-odd budget deficit, it is easy to convince yourself that these things are remote. But as you travel through the countryside ,you slowly begin to see the trauma. Every town the train passes through has the same ‘ghost estates’ on the outskirts – desperate places that are worth nothing, or next to nothing. How will these mortgages ever be paid?
At Thurles, the guy opposite me got chatting about how he’d lost his job in April. He was a young accountant, and he was going to Dublin to do his fourth interview since then. He had expected to bounce back in May or maybe June, but having scoured the papers since then, he was beginning to sink. He’d expected dozens of interviews and was confident that, having finished the first year of training, he’d be fine. But six months on, nothing was emerging. He was 24.
We nattered away until Heuston Station and, as we came closer and closer to Dublin, more and more ghost estates appeared.
From Kildare to Dublin, all we saw were rows and rows of empty housing estates, which were beginning to suffer from what has been called the ‘broken windows theory’.
This is when a neighbourhood begins to falter. A window is broken here and there, and soon the place starts disintegrating. If the windows are not fixed straight away, it sends out a signal that it is fine to break windows. Then the rot sets in.
In time, rather than being ‘worth something’, the houses begin to cost the owners. But the owners might have lost their jobs, so they don’t have the cash to fix up the house and, in short order, the places become quasi-ghettos. This has happened in many parts of the US. It could well happen here.
The key to the ghettoisation of our ghost estates will be the rate of unemployment.
If unemployment continues its upward trend, these places will be abandoned – and might ultimately be pulled down in a crime prevention move in the years ahead. The one thing that will drive crime in the years ahead is youth unemployment (but more on that later).This all sounds radical now, but the lesson from this crisis is that what sounded radical last year is now mainstream, and what sounded mainstream last year just sounds silly.
If we look at the chart from the US, we can see a clear correlation between the rise in unemployment and the number of properties that are being foreclosed on.
While there are outliers like Florida, where foreclosures seem to be running way ahead of unemployment – probably due to defaults on the huge amount of holiday homes in the state – the trend is pretty much as you’d expect.
In Ireland, we will see a similar pattern emerging. I expect unemployment to rise significantly next year as the financial industry contracts. This will mean large layoffs in our banks and insurance companies.
As well as this, the public sector will contract after the budget cuts, and retail employment will fall away after Christmas under the twin pressures of higher taxes and charges, and the strong euro driving thousands over the border to shop.
If we look at our unemployment figures, we see a potentially explosive rise in youth unemployment, which has not been properly documented yet. According to the CSO’s quarterly national household survey,12.1 per cent of our 15to 19-yearolds were unemployed in July 2007.This has jumped to a terrifying 36.4 per cent. Think about it – more than a third of our youth who are not in education are unemployed.
In the next age group, the 20to 24year-olds, the figures are equally frightening. When this government came into power, 8 per cent of this group were unemployed. This figure stands at 23 per cent, or close to one in four, today. In the key 25-34 age group – the ‘Pope’s Children Generation’ -13.4 per cent are out of work now, as opposed to 4.7 per cent the month that this government won the election.
The three-fold rise in unemployment in the 25-34 age group is why defaults will increase dramatically. These are the first time buyers who were shamefully cajoled into getting on the property ladder. Now they can’t repay their loans. Many thousands will simply walk away from their houses, hand in the keys and turn their backs on yesterday’s false dream.
When these houses become vacant – with no one to rent them, because you need jobs to have a healthy rental market – these estates will become classic breeding grounds for marginalisation. Some of the 35 per cent of those between 15 and 19 who are idle won’t be long finding these estates to hang out in. This is the way it goes.
The gardaÃ will eventually stop patrolling the estates, and the places will fall apart. Again, we have the evidence from US cities which, in the 1970s and 1980s, were allowed to deteriorate. The people who live in these estates will try to maintain standards, but they will eventually flee in the face of constant crime.
Many of the young men like the guy I met on the train will just head off if they can’t find jobs, and try their luck in the likes of London, Sydney or Boston. We are just witnessing the tip of the iceberg now.
We are living in extraordinary times, and we need extraordinary policy changes. Thus far, we are just seeing incrementalism because we have been lulled into a false sense of security by the calm before the storm. However, to get out of this mess, we will need to entertain extraordinary remedies. Otherwise, a country with close to 30 per cent of its youth under the age of 25 on the dole could become very, very angry.
It’s like watching a train crash in slow motion, everyone is so stunned about what is about to happen it has caused national paralysis. No one can move due to the horror of what is about to take place. But when the awful events finally take place and people see the extent of the somouldering wreckage there will be uncontrollable anger in the streets.
National Strike to-morrow is liken to a runaway train at high speed without a pilot and the greatest national hypocracy since the foundation of The State and will be the final straw that breaks the camel’s back to cause the demise of The Euro ( a’ la Irlandaise ) .We can ill afford a strike and more importantly its purpose is ill founded .We should not be challenging each other to wanting more money rather instead to agreeing to know how to share it equitably and investing it in our children to help them to find work. The Blue Moon… Read more »
John ALLEN, you are right about the strike in that it is a stitch-up. Rather than 330,000 workers, their families and children, included in the 850,000 schoolchildren, all marching on Dail Eireann to convince the govt to “share it equitably and investing it in our children to help them to find work.”, we have, with Trade Union collusion, instead a “Divide and Conquer” strategy, with mini-pickets outside thousands of workplaces.
It will achieve nothing.
If a possible solution is for Ireland to withdrew from the euro, does anyone know what would happen euro bank deposits in Ireland in the immediate aftermath? Would they lose a lot of their value. And will mortgages and other loans still be denominated in euro. How can the public or private debts in this country ever be repaid?
David, a useful warning. Will it take the possibility of Irish police or Irish soldiers shooting rioting Irish citizens on the streets of Dublin, Cork, Limerick before a critical mass of the political classes realise they have screwed up big time?
The people on strike, will learn pretty soon that they are only hurting themselves.
They will come to realize that it`s their own families and relatives that are being affected by their actions, and this carry on will stop.
Youth disaffection and violence will be another story, as David has recognised.
Interesting article on the European sovereign bond markets:
“However, to get out of this mess, we will need to entertain extraordinary remedies.” Are you crazy? The people in charge are corrupt, inept, and totally compromised by their stakes in the systemic exploitation of latter years of our country’s resources and youth etc. Better for them to do nothing. The reason is because POSITIVE FEEDBACK LOOPS will make anything they do make everything far worse. We have seen plenty of evidence of this in every single significant action they have taken so far in respect to this crisis. I repeat, better for them to do nothing and look towards… Read more »
I get sick when I hear the name union. I appear to me all the unions members are Public Service or Protected Sector (ESB, CIE, Banks etc). Can any tell the CAT are there any “real workers” (people who produce things) in unions any more. So the Unions are just another manifestation of the state on our backs. Please if anybody has numbers the CAT would like to hear them, numbers of Public Sector, semi-sate and protected workers in unions versus the number of productive works in unions.
We are definitely going the way of Chile,Uruguay etc.With no World Cup next summer, irate punters could toss this place into anarchy.Ditch the euro and this will give some breathing space.How are FF still in power?.Never learned to drive Dave?.
Hi David, As someone once wrote, we are really Up The Junction. I agree that the deteriorating (on average) situation will lead to increased crime and delinquency, etc. I also agree that the broken window problem can be the start of a crack in an area, and problem areas do nothing for society. However, I dont think it will be the cause of underutilised youth, at least not at first. I can imagine where the larger ‘under-occupied’ estates will become areas in the future where the kids of now 0-10 find themselves with less to do when 11-20. This problem… Read more »
At least a tinge of reality. The word for today is entropy, to which all the negatives associated with physical destruction and social disintegration can be attached, so that the present run of misfortune which has Cowen zombified, (did you see him with Gormless last night trying to be grateful for frontline workers in flood areas doing their duty for the people on Tuesday, as opposed to his duty to the banksters?) can be understood as the natural condition of existence in a fragment of a sub-Arctic island intermittently under one mile of ice, and generally under a flood of… Read more »
There is no way out of here, so quit believing you can find a way out of here by borrowing more money. The country has to cut, cut, cut because there is no sector other than Big Pharma FDI, that is making money, and not much of that actually finds its way into this economy, other than wages and salaries, and taxes derived therefrom. We are a very little fragment of waterlogged drift in the global tsunami, and the deep submarine currents, previously beyond our view on the helm of prosperity, now toss the fragments of our wreckage into an… Read more »
David. It’s worth reminding how did this happen. Too much lending, borrowing, spending in sum, a binge on materialism. The binging hit the bricks and the result is a ‘snapshot’ as detailed in your article. Ghettoisation. Ireland fell apart at the seams in the consumer binge rabid mania. Ghettoisation. Rabid consumerism ate ireland up and left a carcass in its wake. At least in the eighties we had soul and the mystic. All gone. The only hope of recovery of our soul as a nation we ever had was for the post celtic tiger mutation too go over the cliff… Read more »
Amazing what a trip on public transport can do for ones humour…. :)
Cant see you doing any ads for Iarnroad Eireann… “Its time to take the train”
Start playing a bit of Radiohead, Joy Division or whatever to complete the misery…
The decisions as to who will pay for Seanies gambling debts was made in Fianna Fail headquarters and in the Anglo boardroom… Hopefully the right fuckers will be burned out when it all kicks off in 2011. ..
An interesting link here to further the theme on ghettoisation of the spirit.
The brits are reneging on a sweet heart deal with our gov and are now deciding on to dump 7 billion euro toxic debt into NAMA.
The brits see irish society for what it is and never falter too exploit it any chance they can.
They see a broken country like a broken window and surprise surprise why not dump the toxic loans after all over there, what does it matter!!!!!!
There ahas been much discussion recently in DMcW’s blog about the Henri handball incident.
Maybe it was pay-back time. See:
The media are constantly looking at the causes of the current crisis as if to understand how it happened would in some way resolve the matter and lead us out of the financial crisis we are in. Understanding how it was reached is not going change it, nor indeed is it going to provide a clear path out of it because analyzing it in this way assumes there is a goal to reach and that it is necessary to figure out what is needed to reach that goal. However there is no goal. No one has defined, or can define… Read more »
Gerard Brandon : I concur
I think we all should stand up on boxes to see what cards the gov are playing otherwise we shut down The Casino
It’s moving beyond a few broken windows and disgruntled youth…….
IMF warns second bailout would ‘threaten democracy’
At least China seems to be regulating things
Hi All, Time to tune in to Confessions of a Public Service Worker. I will be on strike tomorrow and to say I’m dreading it is an understatement. I fully expect verbal abuse (at the very least) as I’m on picket duty at lunchtime in Dublin city centre. I have serious reservations about the whole thing, yet I’m seething that this politically, financially and morally bankrupt government sees fit to hand over billions to its buddies while telling us there’s no money in the kitty, and while it’s buddies in the media ipso facto blame PS workers for the crash.… Read more »
Ghettoisation of the planet.
The great global warming POnzi scheme EXPOSED.
David – the crux of your article is that we have created the perfect economic conditions for crime. But I thinks that it is possible to say that we have the perfect legal framework for crime. And we also have the perfect political establishment for crime. The centre don’t care, the right want to exploit the situation, and the left want to mollycoddle the crims. Nobody looks on it as a problem to be solved. If anything the legal profession seem to think that crime is an industry to be fostered and nurtured !!! Even if there was no recession… Read more »
The great man made global warming HOAX EXPOSED.
The global warming “hoax” is probably itself a hoax. Believe this from flood ridden Cork. What planet are these 4×4 luuvies on? Great points David but the “broken window” effect is about crime not society – the idea that tackling “petty crime” will lock up at least a percentage of those responsible for major crime. Its the same policy that persecutes individual drug users because the police cannot catch big dealers, and then proclaims itself a “success.” The problem with these estates is that they are caught in a vicious circle between overenthusiastic speculation driving excessive rents and mortgages, and… Read more »
We have had these weather conditions before, when the Roman’s ruled Europe, it is all cyclical. But, people only think back to when records began i.e. when property speculation, trips to NY and fancy Mercedes became popular.
more on the leaked emails from east anglia;
blows the lid off the global warming fraud. I’m so glad cos for a minute there I was worried about haing to pay a carbon tax……..phew :-)
This cheered me up..
I have listened to the radio to an appeal from the West of Ireland concerning support for families in East Galway. It is very shocking. People are looking for blankets, and clothing. I do not know the rest of the situation. Those who have not been affected by the flood are very, very lucky. I get the feeling that the clean up effort in the West will take about one month. Bear in mind that we are talking about areas where there is a low percentage of young people thanks to decades of emigration and rural depopulation.
We live on an island shaped like a saucer according to the Irish Times…………John Allen might derive something interesting from that in terms of moon wobbles!
Oh, and no one died from the flooding, aren’t we lucky – if this is the level of analysis from supposedly the number one paper in Ireland no wonder the country is f**ked!
The Great Change : I think the reality of mortality and non-infallibility of the system we live in is finally dawning upon us but is it too late that is the real question.It is easy to understand now after watching the great floods around the country how it was possible that Dun Aengus was originally a circle and a Space Center of another kind in another time. The Elements of nature speak louder now than the whispers in The Dail can ever possible do and unless we have Leadership our calls for Hope are gone down the rivers.We are in… Read more »
The first paragraph of this article is refreshing, even if the rest of the content usually leads
people that I know, to tell me to stop talking down our economy.
America soldiers are normally from poor backgrounds, struggling to pay bills
I guess the European Army will contain many poor indebted Irish
They don’t need draft in US, so rich middle class kids don’t have to go to Iraq and Afghanistan
That’s the future if you ask me, thanks to all those who campaigned for, and those who voted for Lisbon
[…] of the nation – David Mcwilliams Ghettoisation of the nation […]
“believe whatever you want”.
What’s that mean?
Are you implying Malcolm is easily led. LOL
looked for malcolms invective but could not find it.
But what I did find is emails straight out of ‘man made global warming’ h q central that is very suspect.
Mind you the premise that global warming is man made is incredibly hubristic.
on the ‘nothing secret about the fraud gov is facilitating’.
The ANIB cover up! OR
AIB / BoI cover up on off balance sheet numbers.
in the words of the great songwriter
noel gallagher ” PANIC IS ON THE WAY “
Liam and Malcolm : Newsnight last night BBC 2 covered this story as leading news. Coupla interesting points came out. First, the research unit do not research in transparency. Despite funded by taxpayers. Second, mooted the emails hack was an inside job, a rather concerned employee apparently over the mashing up of data to fit in with man made global warming hoax on the pop to get carbon tax going and a world tax collecting agency. OR to quote Gordon Brown, Obama and the rest of these loopers a New World Order..!!!!!! what the hell is that….!!!!!!!!!!!!! anyone know per… Read more »
David, Who owns the empty houses in the ghost estates? The Developers. Who will be the losers if ferral youths take over these estates? The Developers. Solution: Why don’t the developers sell these houses at current market value (defined alone by how much a potential 1st time buyer is prepared to pay for the 3 bed semi)? Can’t sell them for 150k? Can you sell them for 125k? No? Can you sell them for 100k? Yes? Great news, lets shake on it, here’s the keys. Isn’t it better for them to get something for the houses now, rather than nothing… Read more »
Good article and finally I am glad that somebody has written about it . This is the bread and butter of long term recession . After the drama of such titles as ‘ NAMA is highway robbery ‘ come the long boring and soul destroying life in the ghetto . Once all those people with massive debt default on their loans the government will have to house them and they will do it in these ghost estates as the government will after all own them . There is no infastructure in them , shops , schools etc and crime and… Read more »
The future of American suburbia, we will follow since we’re closer to Boston than Berlin after all. Kunstler is a very good presenter, you’ll enjoy his humour here.
Folks, the “dogs-on-the-street” are finally beginning to realise that the govt is destroying the economy with cuts. Taft comments on the destruction here: http://www.progressive-economy.ie/2009/11/hall-of-mirrors.html The downgrading of equality and human rights in our society, of which ghettoisation is part, is examined well here: http://www.irishleftreview.org/2009/11/24/owngrade-equality-human-rights-assessing-impact/ Incidentally, I heard something very interesting on George Hook’s show this evening: An “employment expert” (whatever that is) stated, in discussion about public sector workers and the economy, that the (scary, scary!) IMF “…moved into Romania and told all public sector workers they must take 10 days off per year, unpaid.” Now, he was using this… Read more »
Sometimes a cartoon can work the truth so much better.
MK1, “Up the Junction” was a No. 1 single for “Squeeze”; I think Jules Holland was the Pianist, but I cannot remember the year.
We simply cannot substitute the windfall taxes from stampduty for anything else or we’d deflate faster than we can inflate via public spending. This is the dilemma we face. This is what being screuuuuuued is all about.