Penelope Dramaturgy Website
2008 Economic Crisis
What is a Housing Bubble?
A housing bubble, or a real estate bubble, is a run-up in housing prices fueled by demand, speculation, and exuberant spending to the point of collapse. Housing bubbles usually begin with an increase in demand in the face of limited supply. As a result, speculators, or short-term investors that take on significant financial risk in the hopes that the financial gain will be large enough to off-set the risk, pour money into the housing market in order to further drive up demand. However, at some point, the demand will decrease or stagnate as the supply continues to increase, resulting in a sharp drop in prices, and the housing bubble bursts.
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A housing bubble is a sustained (taking place over multiple years) but temporary condition of over-valued prices and rampant speculation (risky investment) in housing markets
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The US experienced a major housing bubble in the 2000s caused by inflows of money (from speculators) into housing markets, loose lending conditions, and government policy to promote home ownership.
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A housing bubble is a temporary event and has the potential to occur, or burst, at any time market conditions allow it
Traditionally, the housing market would not be as prone to bubbles as other financial markets because of the large transaction and carrying costs of owning a house. However, if banks and financial institutions rapidly increase the supply of credit by lowering interest rates and loosening the standards required to receive a mortgage they can bring more borrowers (who then become homeowners) into the market and fuel demand. These types of loans, who would not be granted under normal circumstances, have been called subprime loans. But, by lowering the standards to receive a mortgage and temporarily lowering interests rates (called an adjustable-rate mortgage), only to raise them 2-3 years later, after borrowers are obligated to their mortgage, this traps people who are unable to maintain their mortgage obligations to default on their mortgage leading in mass mortgage defaults and home foreclosures.
Irish Economic Crisis
Because of the global ties of the American economy, many countries and banks internationally were severely impacted, and, many banks were replicating the practices of American banks, creating housing bubbles of their own. Ireland was in a particularly difficult situation. From the 1960s to the 1980s, the Republic of Ireland was economically behind EU core countries. However, as result of policies implemented since 1958, Ireland experienced a period of significant economic growth, with a clear acceleration in 1994, so they were able to catch up with the other EU member states in the early 2000s and then exceed the EU's core countries in 2003. This period of remarkable economic growth in Ireland was known as the Celtic Tiger period. Ireland had transformed its economy within four or five decades.
Unfortunately, on September 15, 2008, the financial services firm Lehman Brothers collapsed and filed for bankruptcy; at the time it was the fourth largest investment bank in the United States. The Irish housing bubble burst shortly afterwards and as the Irish economy at the time was unusually reliant on building houses, and the result was much more impactful: the Irish banking system was in such jeopardy that the Irish government had to announce an unconditional guarantee of $440 billion for most liabilities of Ireland's seven major banks; unemployment tripled to 14.4% in 2011; the Irish GNP per capita shrank by almost 10% in 2008 and by another 12% in 2009; the public debt of the Republic (which they had reduced from 110% in 1987 to 24% in 2007) rose to during the crisis to 123% of the GDP. In 2010, Ireland petitioned for and the EU granted a financial rescue plan of 90 billion euros, almost 60% of Ireland's 2010 GDP, in the form of a three-year loan, was negotiated with the European Commission, the European Central Bank, and the International Monetary Fund.
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Between 2008 and 2010, nobody in Ireland was untouched by the crisis. It was assessed that from the combined effects of the cuts in welfare rates and the increase in taxes that most people experienced a loss of income around 10%. The achievements of the 20 years of economic growth during the Celtic Tiger were lost in 4 years.
Citation:
Vanessa Boullet, « The Irish Economic Crisis: The Expiry of a Development Model? », Études irlandaises [En ligne], 40-2 | 2015, mis en ligne le 15 décembre 2017, consulté le 08 novembre 2023. URL : http://journals.openedition.org/etudesirlandaises/4730
How does this connect to Penelope?
Enda Walsh wrote Penelope in 2010, at a time when Ireland had been included alongside Greece in Europe's "PIIGS", a deeply insulting acronym for Portugal, Ireland, Italy, Greece, and Spain, countries who were in debt as a result of the 2008 Economic Crisis and therefore deemed a financial risk or threat to the European project and the EU. Thus writing a retelling of a Greek play with contemporary Irish actors and language was an intentional and subtextual parallel between the two countries.
When looking at a bird's eye view, Enda Walsh's text tells a story of a 20 year period of excess, waste, debauchery, and competition between power hungry and ego-driven, yet insecurity ridden, men, that ultimately leads to a destructive ending that all involved foresaw and anticipated, yet did not prevent from happening.
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If we dig into some specific references, the names of three out of four characters on stage have names with allusions to Irish businessmen who helped create the era of Irish economic growth called the Celtic Tiger. Notably, the characters of Burns and Murray do not have a connection to a significant person by name.
Quinn = Sean Quinn
Sean Quinn was the former Chairperson of the Quinn Group. In 2008 he was Ireland's richest man, worth almost 4 billion euros, but he was declared bankrupt in 2012.
Dunne = Ben Dunne
Ben Dunne was the former chairman of Dunne Stores who bribed numerous politicians and who was infamously arrested in a Florida motel where he was charged for cocaine possession and soliciting a prostitute.
Fitz = Sean Fitzpatrick
Sean Fitzpatrick was the Chief Executive of Anglo-Irish bank, the financial institution that, more than any other, helped to undermine Ireland's reputation and economy.
