Laying bare the secret behind the Celtic Tiger

There is a poetic piquancy to the news that the Celtic Tiger has made us fat. It was reported last week that a study, conducted over the past three years by universities on either side of the Border, has revealed that the average Irish person is nearly a stone heavier than 10 years ago.

No figures are available for the 1980s, at the start of which our then leader, Charles Haughey, urged us all to tighten our belts. It appears that, having chewed our iron rations for a time, we then took to heart the further injunction of Mr Haughey's svelte fiscal hatchet-man, a.k.a. Ray MacSharry, to cast away our doom and gloom and succumb to bloom and boom. We have succumbed, it seems, not wisely but too well.

There is an old metaphor lying around my desk which I have not used for a while: the image of Charles J. Haughey as our fat chieftain. The idea is that, as in some primitive societies, we chose as our chief a man who by his plumpness created confidence that he could feed the tribe as well as he fed himself. This is the "secret" of Charles Haughey's political success: because he was rich, we imagined, sneakily and at the back of our minds, he could make the rest of us rich.

The funny thing is the extent to which he did. There is now some vague awareness that the recovery which gave birth to the Celtic Tiger had something to do with fiscal rectitude, yet a sense that this is nothing like the full story. It strikes me now that the mystery of the Celtic Tiger makes that of Charles Haughey's finances seem as clear as an ultraviolet money trail.

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My colleague Vincent Browne led for many years a campaign - sadly, without much success - to discover the secret of Mr Haughey's wealth. Today there is a mission for a like-minded crusader: to lay bare the secret of the Celtic Tiger. I suspect that, in due course, we will observe in the entrails of that excavated feline skeleton a similar pattern of dodges, strokes, funny money and hard neck as we now observe in the fiscal history of Mr Haughey.

IN OTHER words, if our previous financial embarrassment bore a passing resemblance to Mr de Valera's notions of frugal comfort, our present shut-your-face-and-take-a-look-at-my-wad style of prosperity is undoubtedly modelled on Charles Haughey's brass-necked approach to the management of money.

Charles Haughey did to the public finances in office - particularly from 1987 to 1992 - what he had been doing to his private finances for several decades. Consider the following key elements of the strategy employed:

(1) Borrowing: The strange thing is that Mr Haughey was a late and reluctant convert to adapting this particular methodology to the national economy. In 1974 he warned: "We should be very conscious of the fact that we must not come to accept budgets which are, as a matter of course, going to finish up with a deficit which has to be borrowed". This was around the time of his buttock-clenching encounters with the Scrooges of AIB.

It was actually his arch-rival, Dr Garret FitzGerald, who first promoted national borrowing on a grand scale. In 1966 a deficit/GNP ratio of nearly 1 per cent was regarded as a serious crisis; 11 years later, the ratio was roughly 10 times that figure and Dr FitzGerald was fretting publicly that we might not be borrowing enough.

Following his infamous January 1980 TV appearance, in which he lectured the public about living beyond its means, Mr Haughey took a leaf out of his rival's book and settled into running the country along much the same lines as he ran his personal finances: borrowing from Peter to pay Peter back.

(2) Begging: In 1987, on reclaiming office after five years, Mr Haughey found his borrowing options considerably circumscribed, and diverted his energies to adapting his private talents for begging to the global economic arena. As a result, in each year of the 1990s Ireland Inc received transfers from the EU amounting to an average of 7 per cent of GDP.

(3) Inducements: During this period also foreign industrialists and bankers were offered irresistible inducements to locate here rather than someplace else. Thus was Ireland Inc transformed into a money-laundering operation for international capital and enabled to become the industrial equivalent of the Cayman Islands.

It is a most peculiar thing that, whereas we seem only too delighted to accept the benefits of Mr Haughey's philosophy and efforts in the public sphere, we simultaneously seek to bury him for the years he spent perfecting the arts of begging, borrowing and stroking before he came to be in a position to exercise these talents in the interests of the general public. Now, in our obesity, we seek to hang the fat chieftain because he is fat.

There is a, yes, fatuous idea going around the place to the effect that if all the rich businessmen currently being investigated by tribunals had been paying their taxes all along, we would not have had the recession of the 1980s. But even if every fat cat in the country had paid his fair share, the amounts would be paltry by comparison with the scale of the then crisis.

Mr Haughey did not make us poor in making himself rich, still less did he make himself rich by making the rest of us poor. On the contrary, to the extent that we are now rich, it is because Charles Haughey was the kind of man he was with the kind of faults he has.

In the years he was ostensibly feathering his own nest, Mr Haughey was actually conducting detailed research of the methodologies which he subsequently employed to make the average Irish person a stone heavier than when he began. Surely any expenses incurred in the course of such research should at least be tax-deductible?

But that would not be in accordance with tradition. In the fable of the fat chieftain, the people, having decided that their corpulent chief has outlived his usefulness, lose little time in cooking and eating him for breakfast.


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