Economist’s honesty might encourage others to admit failings

Morning View
Morning View

In an impressive display of candour, a leading Irish economist has admitted his lasting regret that he gave an upbeat forecast on the Republic’s economy in the early stages of the credit crunch.

Professor John FitzGerald, who was an ex-chief at the Economic and Social Research Institute (ESRI), said no one else was to blame for his blundering assessment.

Prof FitzGerald, son of former Taoiseach Garret FitzGerald, was speaking to TDs and senators investigating the financial crash that caused misery south of the border.

It is refreshing to hear such rare and public self-criticism.

There has not been much of it during or in the aftermath of the credit crunch here or elsewhere in Europe or in America.

In Northern Ireland, for example, our housing crash was every bit as bad as the Republic (property prices collapsed by 50 to 60 per cent on both sides of the border). But there are not many signs of Stormont examining that disastrous housing bubble and trying to draw lessons from it.

The property boom was talked up by estate agents and by bankers.

And a further tier of people who ought to have been disinterested observers, such as politicians and the media, failed to see what was happening and to denounce it.

Many hundreds of thousands of people in Northern Ireland were happy to grow rich in their homes due to soaring house prices, funded by a younger generation of home buyers paying multiple their incomes to get on the housing ladder, having been told by their elders that “you can’t go wrong with property”.

If anything was rich for denunciation by clergymen, it was this frenzy, but there wasn’t much sense or concern in 2006 that the bubble would burst.

It did, and when it did, few people admitted any blame.

Prof FitzGerald, however, was humble enough to concede his own failings and might encourage others to reflect on their own culpability.