Reputations are earned, not bequeathed, and a crisis tends to bring that to the fore. In sport, teams gain a name for a certain style or temperament, not because they want to be thought of that way, but because they have proved themselves. Similarly, in a financial crisis, the reputations of individuals companies and countries are tested. The Irish banks and the state have failed miserably on both scores.

But it doesn’t stop there. The Irish Central Bank did not give the faintest inkling that this meltdown would occur; nor did the Department of Finance. We can overlook the financial sector economists who continued to cheerlead, because that is part of their job.

But in the economics and finance game, there are still some outfits that have failed miserably, and are still being taken seriously. This takes some chutzpah on their part.

For example, a few weeks ago, there was consternation about the downgrading of Ireland by Standard & Poor’s, the rating agency. There were headlines about the great tragedy of being regarded badly by such a famed international institution as S&P.

Were not these the same guys who gave AAA rating to sub-prime products? If they were happy to rate toxic debt as ‘‘AAA’’, what in God’s name do they know about anything? Why does anyone take S&P – or indeed any of the ratings agencies – seriously?

And what of our own Economic and Social Research Institute? This week, the ESRI came out with a dramatic forecast of 17 per cent unemployment and a prediction that Ireland would experience the worst recession in the western world. The Institute went on to opine that Ireland would have mass emigration and something akin to a collapse in the economy.

Its predictions were listened to as if it had some great insight. The papers led with this story, as did the RTE News at 6 and 9, plus the radio shows. Editorials were based on its content.

Why? I am not saying that it is wrong – I am just pointing out the fact that, like the S&P, the ESRI has got little right so far on this boom/bust cycle. Its own spin is that it has been on top on the situation, but the reality is quite different.

Less than a year ago – just think about that: a mere 12 months ago – the ESRI released a forecast for the Irish economy, predicting that for the next seven years, Ireland would ‘‘grow by 3.75 per cent on average per annum’’. It went on to say that, after a blip in 2009, ‘‘the economy would continue to outperform its EU neighbours’’. Consistently since 2005, it said that a ‘‘soft landing’’ in the property market was the most likely outcome, with a collapse a ‘‘possibility’’ . . .but just that.

The august ESRI with dozens of economists on its payroll, devoted much time to discussing the importance of demographics underpinning the economy. Who remembers that argument?

This partly government-funded independent research institute also went on to ally itself with the lender TSB to give monthly updates on the housing market.

Again, as late as last year, this particular ESRI publication was talking about a ‘‘soft landing’’. In its worst-case scenario for the Irish economy, the Institute forecast that the economy would ‘‘under perform by an average of 0.7 per cent per year’’!

How’s that for a volte-face? According to the ESRI, this time last year there was a possibility of a modest underperformance and now we face the worst downturn since the Great Depression. What are we to think?

To put this week’s dismal forecast in context, let’s see more of what the experts in their new building in the docklands said last year: ‘‘Even if current difficulties prove more severe than anticipated, the economy is resilient.” Really?

‘‘The prospect of continuing medium term growth above the EU average is underpinned by favourable trends in labour supply and in productivity. While unemployment is currently rising, with a flexible labour market there should be a return to full employment. Despite current difficulties in building and construction, the economy needs continuing substantial investment in housing over the coming decade.”

Yet their latest report is regarded as gospel. This time last year, following the demise of Bear Stearns, when it was known that the Irish banks had borrowed enormously abroad to finance the boom, when the credit crunch had been ongoing for at least eight months, and when the price of houses was regarded by many punters as a joke, the ERSI claimed that the Irish economy needed more houses!

Perhaps the reason the ESRI is so revered unquestioningly is because we in Ireland still have some misguided idea that the ‘‘expert’’ knows more than the average man. Maybe the lesson of the great Irish bust is that reputations have to be earned: don’t accept anything just because it is presented in a traditional form (which, by the way, includes this column). The problem with putting too much store in the forecasts of those who have been lamentably off-target is that we will learn nothing from this experience. In the new Irish world, which emerges from this crisis, unearned reputations should count for nothing. We need to change our mindset completely.

We have seen that institutions like AIB or Bank Of Ireland have failed their shareholders drastically. We have seen how S&P has given toxic waste AAA ratings, thus enticing people into investing. And we have seen how the ESRI has feet of clay like everyone else. Maybe a little bit of humililty might be in order from the professors of the Docklands Poly?

The bankers and politicians are taking a hammering for their mistakes and their hubris; maybe the same could be doled out to all those who, when it is easy to do so, like now, are merely confirming people’s worst suspicions but, when it was hard and unpopular, kept their mouths shut.

In the ESRI’s case, like the Central Bank and the Department of Finance, whether this failure was because they couldn’t see it coming or because they wouldn’t see it coming, we can never know.

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