04/04/2010 05:12 am ET | Updated May 25, 2011

Irish eyes aren't smiling on the Emerald Isle

EXPECT MORE Irish misery memoirs in 20 years' time. Like a familiar glove, despondency has again wrapped itself around the Emerald Isle. Except this time we've lost the sense of humor and the warm spirituality that saw us through miseries past. Without these anesthetics things are now truly grim.

Self-loathing, too, has made a comeback, as has guilt. But worst of all, this time we can't blame the British. For it was an all-Irish cast of real estate developers, bankers, and incompetent governments that brought Ireland over the precipice.

Notice that I did not say to the precipice. We are over the precipice and falling fast. The only question now is just how hard will we hit. It's a story of dashed hopes, anger, and despair. It might cheer you up if you think you've got it bad.

House prices are down 50 percent and falling, unemployment is at 12.7 percent and rising, the gross national product has dropped by 11.3 percent in the past year and is still falling.

It all began in the early 1990s when things couldn't get any worse, so they didn't. Things actually got better very quickly. Because of low tax and wage rates, the English language, and an educated workforce, American pharmaceutical and technology companies swarmed to Ireland. We became a European hub for practically every major American corporation: Dell, Microsoft, Intel, Google, Pfizer, the works.

This was quite something for a tiny country with a population less than Greater Boston. But this population was mushrooming. By 2007, 12 percent of the population were immigrants, almost all of whom had arrived since 2000. This is equivalent to the United States accepting 36 million new people, or the entire populations of Canada and Mongolia, in only seven years.

Yet there was work for all comers and pay rises galore and the "new Irish'' were welcomed warmly. We got wealthy fast, and like all people who do, we got a bit uppity. A bit beyond ourselves. 'Twas far from New York shopping trips and third homes in Spain we were raised, but there we were. We had it all. By 2007, we were per capita the wealthiest country in the European Union bar Luxembourg, and wealthier even than the United States.

All this growth was built on fairly solid foundations until 2002. From then we chose to use sand as the foundation for our castles in the air, to mix metaphors. No more real money was coming in to the economy but, not to worry, there was a lot of funny money to go around our little island in a circular fashion.

A real estate frenzy built the illusion of ever-growing wealth. Borrowed billions flowed in through our unregulated financial services center to feed the real estate monster that built 90,000 homes a year while Britain, with 15 times our population, built a mere 120,000 homes per annum. As a nation, we came to define Alan Greenspan's concept of "irrational exuberance.''

It was around this time, too, that a subtle but dark shift occurred in the Irish persona. Until 2002 or thereabouts, all this money was a bit of a laugh, we giggled about it, and couldn't believe that we were getting away with it, but then, a superior attitude took hold of many. A once friendly, humble, and naturally egalitarian nation became arrogant, competitive, and rude.

Oddly it was a German, whose countrymen are not known for their sense of humor, who captured this moment in a one-liner.

In 2007, Berlin's ambassador had been at the National Concert Hall in Dublin when an announcer appealed for the owner of a 1993 registered car to move the vehicle because it was blocking an entrance. "Of course no one moved,'' Ambassador Christian Pauls later quipped, "all the Irish are driving 2006 and 2007 cars. For all I know, the car is still there.'' He then merrily went on to describe Ireland as a coarse place with a sad history where the natives are obsessed with money.

His humor earned him a formal diplomatic rebuke. But at some level we knew it was true: we had become the worst sort of nouveau riche.

This newfound pride came before the fall of 2007, when the real estate bubble burst. Property values slid ever downward, then along came the global financial crisis and things slipped further still. Stock markets crashed and unemployment rose. Vlad, our friendly Polish builder, went home, and so there was nobody to buy or rent the tens of thousands of vacant apartments.

In 2008, the hangover, and reality, kicked in horribly. We awoke from our collective champagne binge to find ourselves a small isolated country on the edge of Europe, rife with unfinished housing projects and joblessness, once again raising our children for emigration. Pensions and stocks have evaporated like the Irish mist. Our dreams are no longer haunted by the specter of the banshee, but the International Monetary Fund.

But what a party it was. When is the next one happening?

This article originally appeared in the Boston Globe on January 4 2010