Monday, November 15, 2010

"Where has all the money gone?"

7 Billion, 24 billion, 35 billion….
Bail Out,
Bond Markets,
Ollie Rehn,
Front loaded adjustments,
Budget deficit,
Blah Blah Blah,
Gobbeldy gook
It streams from my radio.
It jumps from the pages of my newspapers.
It scares me to death and yet it is meaningless.
Words, totally unconnected to my day to day existence.
But yet words that are part now of the soundtrack to our lives.

Before these words became common language, long, long ago, at the very beginning of this recession, my daughter Mia, then 8 years old asked me “Mom, where has all the money gone?” At the time I smiled at her innocent grasp of the new financial reality. “Yes, child” I answered her “wouldn’t it be great if the Government could just print some more money for us all.”

I was recounting this anecdote recently to a friend when I thought again of her question “where has all the money gone?” The question stayed with me all day. Yes, where indeed has all the money gone?

Our current financial meltdown was triggered in large part by the property developers. The men who paid hugely inflated prices for parcels of land on which they had ambitious and unimaginative plans to build houses and apartments. We all know what happened next. The property market collapsed. The land became almost worthless and the developers couldn’t pay back the huge loans they had borrowed from greedy and clueless bankers.

So, Mia innocently asked “where did all the money go?” Someone got paid the large sums borrowed from the banks, which we are now effectively paying back! Surely there is a case to be made for an investigation into those who were paid the hugely inflated prices for their land. I understand that this is how land and property speculation works. But it is morally right that this modest cohort of people, whose bank accounts now bulge with possibly millions of euro, should be allowed to hold onto it? Meanwhile our Government considers reducing the Old Age Pension, Children’s Allowance and other benefits, our young people emigrate in thousands and our economy collapses all around us. We in effect are paying for their financial windfall.

To go after this money, would take courage and determination. I know that it wouldn’t solve all our problems, but it would go some way towards restoring a sense of fair play to the rest of us who profited only very modestly by comparison and then only by working hard during the Celtic Tiger’s roar. At the very least surely some kind of extra tax could be levied on the millions paid for what are now useless fields of dreams.

My daughter has a point – “where did all the money go”. We know where a lot of it went, and we seem happy to pay it back in order to protect some principle of a free market economy. I don’t think that Mia, now 10 years old, would consider that to be very fair. And neither do I.