The Taoiseach needs to tell the Germans their banks’ mad gambles were to blame as well.
WHILE I believe that Taoiseach Enda Kenny’s comments at Davos have been exploited by those with political axes to grind, the remarks themselves were inaccurate, and the venue chosen to utter them — the World Economic Forum — was unfortunate. Simply put, it would have been wrong to suggest in front of an audience of world leaders, creditors and potential investors that the cause of our Republic’s economic decline was collective population madness, even if it was true, which it actually wasn’t. Well, not completely true anyway.
If our decade-long credit- fuelled financial binge was due to a form of collective delusional thinking, as the Taoiseach suggested, then it was a malady that was largely caused by the very financial professionals whom we trusted to protect us from any incipient monetary madness. If our bankers had been our doctors, they would have been selling us cigarettes, while reassuring us that smoking was good for you. They would have urged us to get on the smoking ladder earlier, as it would be a more difficult ascent if we started too late. If our bankers had been our clergy, they would have told us that not only was adultery no longer a sin but that the churches were going to support the consummation of this new dispensation, by importing low-cost foreign courtesans (ie, cheap credit) for our delectation.
No, most people did not go mad. Or if they did it was a hereditary madness. Did the Irish turn into a nation of Charlie Sheens, melting down in front of seven million Twitter followers, or attempting to communicate with Elvis via radio broadcasts from the Spire? No, for most of them, this madness took the form of buying a home.
Doesn’t exactly rank with thinking you are Joan of Arc or Napoleon now, does it? Having absorbed years of cultural propaganda about home ownership, having been advised by everyone about the necessity of getting their foot on the property ladder, they took advice from a once trusted but now vampirical financial priest class, the bank and building societies’ advisers, about what type of mortgage they could afford. Unknown to these clients, a bizarre Reformation had taken place in this particular faith, and the formerly parsimonious clerics had evolved into shamans of Shylockery. They reassured the prospective mortgagee that the old rules had changed, and that the consequence of large debt was no longer the damnation of unending negative equity, but was, at worst, a brief purgatorical phase of “soft landing” followed by the paradise of an eternal property boom.
What is now apparent is that the money doctors weren’t handing out the financial fags to the newly recruited smokers because they were misinformed, but because they were being very specifically financially rewarded to do so. What other forms did this madness take? Prudent Irish people who wished to provide for their retirements and for their children’s futures were systematically and repeatedly advised to invest in tax incentivised pension schemes. Now these pension savings are being raided at the same time that we are paying money to the gamblers who attended the Taoiseach’s Alpine fireside chat. Even if it is true, was it wise of the Taoiseach to announce his diagnosis?
Vigorous propaganda is being fomented in creditor countries, propaganda which portrays us as irresponsible, dissolute, feckless drunks, who borrowed the savings of German hairdressers to go on a 10-year-long Dodge City spree of oysters, champagne and million-euro weddings. Now, we are told, we must pay for our epic party. The Taoiseach calls it madness, the Germans irresponsibility. The German public hears less about how their own banks and pension funds made insane bets on Irish real estate via Anglo Irish Bank. This is the message that the Taoiseach needs to drive home. The violence of the reaction of two legs of the troika to any suggestion that we might seek debt renegotiation suggests a little more vulnerability than is apparent. It is time for us to accept the blame which is ours, and to point out that which is not.
