We muddled through and survived — but austerity has taken its toll

While most of us sleepwalked into a nightmare of financial disaster a decade ago, some saw it coming and predicted its cost, writes Liam Collins

WHEN I missed a mortgage payment and had to put €3,000 on the credit card to pay college fees for one of the kids, I knew that financially I was in real trouble.

The worst part of it was that I had seen it coming from early 2007 — or rather a very wise political acquaintance nobody wanted to listen to had been hammering home the message “This is all going to end badly”.

Looking back on the so-called lost decade, I cannot but ruefully reflect that Brian Lenihan’s much derided claim that “we all partied” has a ring of truth.

Don’t get me wrong, we didn’t buy property, even though I was temped when a friend rang one night and said: “I can get you two apartments” in north Dublin, convinced he was conferring a big favour on me, such was the rush to acquire these desirable properties which could be “flipped” on completion for a handsome profit. Thankfully I said no. We didn’t buy a holiday home in Spain or Portugal, although we slavered over television programmes like A Place in the Sun.

We didn’t even buy a new car. And our children didn’t attend private schools.

So in many respects we were very lucky compared with other people. Our house wasn’t in negative equity, we lived what appeared to be a good lifestyle, and our children wanted for nothing.

Even the holiday in Florida hardly cost us a thought — everybody was doing it.

Yet towards the end of every month, there was this churning fear before payday when the overdraft was exhausted and the money literally ran out. Everything went on the credit card, and the balance kept rising at an alarming rate because there wasn’t enough cash to make a dint in it.

We weren’t alone, but the undertone of desperation that was beginning to creep into the “squeezed middle” was hard to detect, even in late 2007. Prices were rising, wages were not, childcare was prohibitive and costs seem to be escalating on every front. But people were afraid to talk. Any word of dissent led to accusations of “talking down the economy”.

The answer was to dig into the overdraft, slap it on the credit card, keep the show on the road and don’t let the neighbours see you blink.

But I was listening to my political friend, and he was watching Bertie Ahern edging towards the door of the Taoiseach’s office and Brian Cowen being gently shoved in that direction, even before April 2008 when it became a fait accompli. “He (Cowen) is an intelligent man, why is he accepting this? He’s being handed a poisoned chalice,” my friend would say. So where did it all go wrong? Reel back the years to the turn of the century, but particularly around 2005 when Ireland was in the middle of the boom-time party.

We partied too, it just didn’t seem like that at the time. It seemed like a sensible thing to do, with a relatively low mortgage and a growing family. We built the dream extension and went for the best of everything.

“Just because I’m Russian I’m not cheap,” said the builder and he wasn’t, but at least he did a very good job. “How much do you want?” was the hardest financial question, not “How are you going to pay it back?”

The advice was to wrap any other debts into it and put it all against the house. Then there was the three-year ‘interest only’ repayments to give you time to draw breath.

When I proposed selling a tranche of bank shares to cover the cost of the new kitchen, including the obligatory island, I was told: “Don’t be stupid, hold on to them. They’ll be a good nest egg some time in the future.”

Without even thinking about it, we were sleepwalking towards the edge.

The warning signs were piling up. The sub-prime mortgage disaster was sweeping the United States.

Michael McDowell had promised to cut stamp duty and the Irish housing market had collapsed, almost overnight. The growth rate of the Irish economy was in sharp decline and the wise money was finding a safer home. People still hate the bankers and the developers and the senior civil servants and politicians who oversaw the boom and didn’t avoid the bust.

They had seen it coming all right, but by the time they did, it was too late to do anything. The country was comatose on the champagne of Stamp Duty and cheap money. As always, it was the “little people” who were about to get squeezed.

The disaster unfolded on Morning Ireland, the Troika came marching up Merrion Street, and the only thing worse than the shame was the dejection.

Like most other PAYE workers, I faced the perfect storm, a wage cut and the introduction of the Universal Service Charge (USC).

A cushion of €500 a month evaporated.

At around the same time, the “interest only” mortgage term ran out and the full repayments were eating up over half my takehome pay.

That’s when I sat at the kitchen table and started weeping.

I knew then and know now that there were people all over Ireland who had far more to weep about. Their businesses were failing, they were losing their jobs, they were trying to sell, sell, sell — houses, cars anything. They had bigger mortgages, school fees unpaid. They were desperately trying to find cash just to keep some semblance of order in their lives. In some cases, they were failing.

I still think of the last time I met the one-time multi-millionaire Hugh O’Regan. We had known each other since he worked behind the counter in the Temple Bar and kept in touch sporadically. Everything was gone when we met for a coffee in The Davenport Hotel. From behind dark shades, he told me: “The difference is that now I’m meeting people all the time for coffee, and they’re paying.”

It’s always the little things you remember.

At the time, I had what, to me, was a high-pressured job, especially coming towards the weekend. I used to go to a pizza restaurant on a Friday at about 3pm for a meal and a glass of wine to settle my nerves for the 5pm meeting. Now, I could no longer afford it, so I’d eat my sandwiches on a bench somewhere and contemplate the world.

There were the phone calls from the bank about the overdraft, the humiliation of being refused a loan. The letters from the mortgage company – “Your direct debit has been returned unpaid by your bank due to insufficient funds”. The calls from utility companies about unpaid bills. The mortgage provider demanding the completion of a lengthy form listing every outgoing, down to the two Friday night pints after work.

There was the drip of a leaking roof during winter that drove me crazy because I couldn’t find it and I couldn’t afford to pay someone who could.

But we kept at it. Like the vast majority of the “squeezed middle”, we had only one asset, a house. And we wanted to keep that roof, leaking or not, over our heads for as long as possible.

My wife took in students, the girls became the local babysitters and we all pitched in and cut back on everything from holidays to meals out, even takeaways.

We muddled through and made changes in our lives to cut down the costs. Like most middle-class people, we survived – even if our pensions were raided and our pockets picked, ultimately to save the bankers and the developers who are back as strong as ever.

It is these things that have driven sections of the middle classes to vote for the mavericks because they were let down by the once dependable centre parties. I remember being in Leinster House during those years and thinking that most of those inside just didn’t get what it was like out in the real world – behind the wrought iron gates they were living in a bubble.

This piece may read like a whinge, but it’s not intended to be.

The last ten years have taken their toll on many sections of society. It’s still taking it on some.

People, for reasons of pride or desperation, have paid the ultimate price with their lives. Others have fallen into mental illness and depression from which it is difficult to recover.

Many have lost their homes their farms and businesses. Others have seen their life savings evaporate, often at a time when they were getting older and less able to cope with such stresses. A whole generation of parents saw their children emigrate to new lives in far flung destinations.

Their struggles were far greater than mine. Because even though I sometimes lived days of quiet desperation, I had a job, a house, a family and a life I enjoyed far beyond the material things that money can buy.

Now looking back, the most important lesson from the “lost decade” is that we should not sleepwalk into another one too soon. Losing one decade was a tragedy, to lose another would be a catastrophe.

‘An acquaintance nobody wanted to hear had been hammering home the message ’