Economy Favourites

Morgan Kelly Predicts Irish Bankruptcy

I’d like to say that Morgan Kelly is an idiot.  I’d like to tell you that he has been consistently wrong in all his predictions about the Irish economy.  I’d like to inform you that this man has no idea what  he’s talking about.

But I’m afraid I can’t.

Morgan Kelly is far from a fool.  He has been consistently correct in his predictions and he knows precisely what he’s talking about.

The man who foresaw the banking crisis long before almost everyone else, who was ridiculed and dismissed by Bertie Ahern’s legion of halfwits, has written an article in today’s Irish Times that should scare the living daylights out of any thinking Irish person.

In Kelly’s own words, Ireland is facing economic ruin.

Tracing the source of the economic disaster back to Brian Lenihan’s absurd banking bailout in 2008, Kelly describes how Professor Patrick Honohan, the incoming governor of the Central Bank, could have used his international stature to reverse Lenihan’s original act of stupidity, but instead compounded the error by taking the ECB’s side and insisting that the banks’ losses were manageable.

A fool’s pardon might be available for Brian Lenihan, a man who manifestly failed to understand the fundamentals of the brief he held, but Kelly leaves no such room for Honohan.  Accusing his fellow academic of the costliest mistake ever made by an Irish person, Kelly has laid responsibility for the unfolding Irish disaster at Honohan’s door.

This is a very grave charge to make against the man everyone hoped would rid the Central Bank of its complacency and incompetence, but Kelly doesn’t stop there.  He goes on to accuse Honohan of undermining Lenihan when, for once, he was doing something right in resisting the so-called “bailout”.  As Kelly puts it, Lenihan was deftly sliced off at the ankles by his central bank governor.

He goes on to provide an interesting insight into who Ireland’s real friends were among the powerful nations.  The IMF’s plan to impose a savage haircut on bondholders was shot down by none other than the United States, in the form of treasury secretary Timothy Geithner, while the only voice in our defence came from the old enemy in the person of UK chancellor George Osborne, though of course, a word of caution is in order here.  Sir Humphrey might well have advised the chancellor to speak up in Ireland’s defence knowing that his position would be defeated.

But still.  A topsy-turvy world indeed when  some of our citizens will shortly turn out to protest against the visit of the English Queen, while others will flock by the thousand to fawn over the leader of the country that consigned us to our doom, and to prance about like leipreacháns while he holds up an embarrassing half pint of Guinness for the cameras.

That’s Ireland for you.  Never mind the reality.  Stick with the illusion.

In the end, Ireland’s bankruptcy was guaranteed by the European Central Bank, which had no thoughts of rescuing this country.  Ireland will be destroyed in order to frighten Spain into behaving as Trichet wishes it to, and it seems his strategy is working.  The bailout could never work, because the sums don’t add up.  We will shortly be facing debts of €250 Billion (with a B).  As Kelly says, try to imagine the Bank of England’s insisting that Northern Rock be rescued by Newcastle City Council and you have some idea of how seriously the ECB expects the Irish bailout to work.

An apt analogy indeed, since the citizens of Newcastle had about as much responsibility for the recklessness of Northern Rock as the average Irish person had for the six private banks that killed our economy through their greed and stupidity.

While it’s too late to make the bondholders carry their share, since Lenihan rushed to pay them all off last year, Kelly offers a solution that he concedes wouldn’t be painless but might at least avoid the coming disaster.  First, withdraw the bank guarantee immediately, and force the ECB to deal with the  issue of insolvent banks.  Second, cut government borrowing to zero, right now.

Does he think the politicians will have the guts to confront the ECB?

No.  He doesn’t.

I wish Morgan Kelly didn’t have such a way with words, but unfortunately, he’s on the button with his brutal analysis of the political reality.

It is easier to be led along blindfold until the noose is slipped around our necks and we are kicked through the trapdoor into bankruptcy.

Brace yourself for the drop.   It will be short and unpleasant, but its consequences will be permanent.


Previous posts containing “Morgan Kelly




I thought GW Bush had imposed an extreme burden on US citizens when I wrote this.  Little did I think that our government would soon go on to impose a far bigger burden on the Irish people, perhaps three or four times as large.




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Osama Bin Laden. Retiring a Skin Job.

Blade Runner is one of my favourite films ever.  It’s dark, atmospheric, filled with uncertainty and ambivalence.  It asks fundamental questions about existence, about the nature of sentience and about the right of intelligent beings to exist.

But more than all that, it’s a cracking great yarn.  The place it inhabits is hot, rainy, sweaty, oppressive, dirty and yet vaguely familiar, as if someone took one strand out of our life’s fabric and rewove it a little bit off-skew, but only a little.

In that world, there are replicants — synthetic humans created to do dangerous work on the off-world colonies.  They’re stronger, smarter and better than us.  We call them skin jobs.

Skin jobs are not allowed to stay on Earth, and if they do, they get “retired” by a .44 magnum bullet between the eyes.  The real danger is self-awareness.  Society can’t contemplate the idea that the intelligent beings it created might begin to demand rights.

I love that movie.  I love Harrison Ford’s demented portrayal of Deckard, the blade runner whose job it is to retire the skin jobs while remaining obsessed with the big question.  Was he himself also a skin job, and if so, what the hell was he doing killing his own kind?

I can’t help wondering if there was a Deckard among the team sent in to retire Osama bin Laden, who was only one among many skin jobs created by the CIA to carry out dangerous work on America’s off-world colonies before he turned rogue.  And I can’t help wondering if the same Deckard took out the other well-known skin job, Saddam Hussein, or Noriega, codenamed pineapple.  I wonder what blade runner has been detailed to whack Muammar Gadaffy, another CIA creation?

Who can tell?  It’s all insane.  It’s all theatre, and I wonder why we continue to swallow the nonsense put out by the media about the evilness of people like Bin Laden.

Does it matter?  Does it make any sense?

The motivation is obvious.  Obama was in danger of being a one-term president, which is always embarrassing, and on this weekend of all weekends, he couldn’t stand idly by while the British Royals took over the airwaves.

Get those sexy drunken Sloans off my television, Obama growled at his Chief of Staff, and by Jesus the armed forces came across. There ya go, Boss.  Dead evil mastermind!

Let me ask you a question.  When is it all right for people to dance in the streets when someone has been killed?

We all witnessed those evil Islamists firing guns in the air and dancing after the World Trade Centre atrocity and we were all horrified, even though it later turned out that the footage was of dubious origin.  Damn.  Nobody could really say who these dancing people were or where they were celebratring, but at least they looked foreign and unshaven, so that’s all right.

Today, we were treated to more pictures of people dancing in the streets after someone had been killed, but that was fine, because the dancers weren’t Arabs but white Christians.  It’s one thing for Arabs to celebrate violence.  That’s just not on, but we all know Jesus was a great believer in celebrating the violent deaths of his enemies.

Kill everyone was the message of Jesus.  Right?

President Obama said that the world is a better place because of the death of  bin Laden.  President Obama, as everyone knows, IS Jesus, in a suit, holding a basketball, so that’s all right, but what he didn’t say was more revealing.  He didn’t reveal, for instance, how they finally got the World’s Most Wanted Man, and that’s because he couldn’t.  The reality is that it could not have happened before now.  Call of Duty : Black Ops is only out since last year and it was going to take time before a sixteen-year-old emerged who was capable of whacking the Boss at the first shot.   Big gamble.

Sadly for the Pakistani authorities, they don’t seem to have noticed the fact that Bin Laden was building a huge castle right in the middle of the neighbourhood where all the retired generals live.  When you consider that the Pakistani military control everything in the country, including the manufacture of cornflakes, that does seem odd.  Perhaps a retired colonel might have mentioned something to a retired Major-General.

I say, old chap, who’s building that giant fortress in the middle of our peaceful neighbourhood?

Damned if I know, old boy.

Walls twenty feet thick, and no-one noticed?  I don’t believe it.  The ISI is one of the most efficient intelligence operations in the world. Nothing moves in Pakistan without their knowledge.  Few things outside Pakistan happen without the ISI opening a file.  This is a serious organisation of spooks, and I have no doubt whatever that they knew precisely what was going on in Abbottabad.  If they didn’t, they would have to be thoroughly incompetent, but whatever else they are, incompetence is one thing you can’t accuse them of.

Therefore, it would be very hard to conclude that Pakistan was not protecting Osama bin Laden, as if anyone was surprised.  The shock is that America waited this long, and from what we’re told, in the end the operation was carried out with the support of Pakistani military.  After all , how did three foreign helicopters fly from India, a hostile foreign nation, through Pakistan’s airspace, without being shot down by the extremely well-equipped and trained Pakistani airforce?  It defies credibility.

I think Osama bin Laden has done some very evil things, including organising the attacks on the World Trade Centre.  Therefore, I have no sympathy for him.  But those attacks were used by Bush and Cheney to justify the invasion of Iraq — a country that had nothing  to do with the 9-11 attacks.

Cheney was always going to make money through Halliburton, who got the contracts for everything that happened in Iraq, but so was Bush, whose Daddy was on the board of Carlton — the world’s biggest arms dealer.  Every cruise missile fired was another few million in Dubya’s pocket.  Sweet.

Today, I heard Tony Blair saying that people responsible for thousands of civilian deaths could expect retribution, and I wondered if he included himself in that statement, since he took a decision to kill thousands of civilians in a country that had never attacked him.

See, it’s all right to kill thousands of civilians in a country that never attacked you, provided you have the power of the western media behind you.  There’s no danger of an attack force led by Clint Eastwood storming Tony Blair’s house or George Bush’s ranch, even though they killed far more innocent civilians in Iraq than Bin Laden ever did in New York.


How the hell do I know?  I’m just looking forward to Deckard retiring the leader of North Korea, another American skin-job, but in the case of Osama bin Laden, I can’t see the operation happening without the support of the Pakistani government.  You don’t fly over a town inhabited almost exclusively  by retired senior army officers without prior approval.


Elsewhere: Who benefits?








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Idiots, Imbeciles and Lunatics

I love the on-line census from 1901 and 1911.  It’s full of amazing information about the people who walked our streets a century ago and as you wander through its pages, you can’t help but be drawn into the diversity of our culture.  I might, if I find time, write up a little thing on what I discovered during my trawl of those who went before but that’s for another outing.  Today, I want to tell you about idiots, imbeciles and lunatics.


One of the headings on the census return form asks about specified illnesses.  Write the respective infirmities opposite the name of the afflicted person, it says.  And what are the infirmities?

Deaf and dumb.

Dumb only.


Imbecile or idiot.




Obviously, you couldn’t leave it there.  You’d have to do a search on imbeciles, idiots and lunatics, wouldn’t you?

So I did, and I came up with an interesting result.

In 1901, there were 1464 idiots, 1958 imbeciles and 514 lunatics.  Ten years later there were only 1116 idiots, 1884 imbeciles and 357 lunatics, which seems to indicate considerable progress, or else a greater efficiency in hiding or murdering embarrassing relatives.

The vast majority of imbeciles in both years were in the counties we now call Northern Ireland, whereas the idiots seem to be spread out across the country.  On the other hand, lunatics show a distinct preference for northern counties.

I don’t know what lessons we can learn from this, but I’m sure regular readers have a view.

Wouldn’t it be great if we could put that on the census form today?

Please indicate if anyone in your house is a …

  • Dimwit
  • Cretin
  • Fuckwit
  • Moron
  • Gobshite
  • Fool

Please also indicate if anyone listed is a …

  • Piss head
  • Spacer
  • Knob
  • Arsehole
  • Tool
  • Wanker
  • Tosspot
  • Ape
  • Gowl

Isn’t it great when you abandon all that old PC shit?  I reckon the Victorians had some of it nailed.

Imbecile? Idiot?  Lunatic?

Line up over there.

I know. I know.  They invented the lunatic asylum, but it was well-meant.  An asylum is a place to find peace.  It was only the grasping gobshites who ruined the whole thing by having people committed to stop them inheriting the farm and anyway, we can’t have lunatics wandering the streets, can we?


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Easter on the Shannon

Limerick, as you know, has the magnificent River Shannon flowing through it, and the river has always been at its heart.  While not quite a seafaring people, we are a riverine species, and why wouldn’t we be when we have such splendour and beauty on our doorstep?

Little more than twenty minutes from Limerick, we have the magnificent Lough Derg, a place we all love, and the scene of many a night’s carousing.

As usual, we all blundered up the lake for the annual blasphemous Good Friday booze-up and singing-thing.  This is a very special custom, for it upsets the fervent and the observant.  It annoys and discombobulates the True Believers, especially the wolfing down of bloody steaks on this blackest of black fast days.

This year, we were spoilt for choice, with the possibility of parties in three different places, and I felt my only option was to attend all three, but I didn’t plan on being waylaid within seconds of my shoe-leather striking the pier, when some friends shouted at me from the plushly-appointed cruiser on which they were slugging back large amounts of foreign beer.

Oi, Bock!  C’mere and have a bottle!

Is there grub? I shouted back.

Sure is, they chortled.

Meanwhile, another crowd of bowsies were shouting good-natured abuse from inside a camper van, but the promise of grub won the day.  Grub and beer.  I am Homer Simpson, and so I boarded the fine vessel and tucked into some fine Czech beer from Budejowicke, a town I once visited solely because it contained that excellent brewery.  (It has little else to recommend it).

Singing drifted across the water from a boat.  Singing, fine musicianship and a little cloud of smoke.  More singing wafted from the camper van.  The smell of steak searing on the bbq filled the magnificent vessel on which I was a guest.  The sun filled the sky and for a little while it was possible to forget what our government and the ECB had been up to.

That was when a gigantic converted barge hove into view and damn me, but I knew those people as well.  This Easter weekend begins to show more promise than I could have hoped for, which is saying a great deal, for these weekends on the Shannon are always first class.

And so it was that the following day, I found myself chugging up the Shannon at three knots, driven by a sweet-sounding 59-horsepower Lister diesel, enjoying the experience of not-very-much happening.

I have to get back, I told my host.

Sorry, he replied.  You’re booked in here tonight.

Right.  I surrendered.  Go with the flow.

It was lovely to note the absence of Celtic-tiger guffaws from illiterate nouveau-riche fools drinking over-priced wine on giant over-priced plastic power-boats they didn’t know how to drive.

As my host remarked, They’re all gone and we’re still here.

You see, in spite of all the economic misery, the gloom, the despondency and the negativity, there are times when you have to look around you and realise that we live in one of the best places in the world.  Therefore, rather than bore you with a tedious account of my savage journey to the heart of Good Friday night, why not just glance over a few pictures and enjoy the wonderful amenity we have on our doorstep?






Smoke and Mirrors — Looking to the Future

Brian Lenihan has delivered the Budget, and it seems that the greatest pain will be borne by the most vulnerable. But we already knew that, didn’t we? The Irish people will be made to suffer for the sake of a bank bailout that was never our fault, for wounds inflicted by lazy and corrupt politicians. I said before that “the government seems to be unwilling to stop giving money to Anglo-Irish, so the cost of running the country must be reduced somehow – and that means bleeding the ordinary citizens of Ireland dry.”

This is the first blood-letting. I suspect the full effect will take time to make itself known.

We can take comfort in knowing that the web of lies is finally beginning to fall apart, as support for Brian Cowen and Fianna Fáil plummets to a record low. It seems that we’re starting to wake up from the dream that they’ve tried to sell us; that they are actually competent and able to run the country successfully, that they can guide us out of this financial storm. The swing voters, who might have leaned towards FF out of familial obligation or out of tradition, cannot delude themselves any longer about the party’s true character. If the trend continues, we may even bear witness to the end of Fianna Fáil as a viable political entity, and a true turning point in Irish politics.

It’s all pie in the sky stuff, unfortunately, for the people on the ground who will take the brunt of FF’s treasonous actions. Who cares what happens in Dublin if your family in Galway can’t pay the bills? What does it matter to a TD on a still-fat salary if you’re in danger of losing your house because you’ve lost your job? And they don’t care, believe me, apart from one or two who desperately try to play the game in the hope of making a difference. The ones in power will ignore your rage and belittle your concerns until you start to think that maybe you deserve this, and there really isn’t anything you can do.

…or is there?

The Law is an Ass

The Dáil could say that we must share in the pain, and pay our taxes like good little citizens, but Cowen and his cronies seem to forget that they are not the only ones with a rather blasé attitude to the law.

This is Ireland. It’s all who you know, and who did you a favour last week – certainly not what’s illegal and what isn’t – and although it was that kind of thinking that got us into this mess, it might also be the thing that shields the ordinary people from the worst of it. In another country, and another populace faced with high, unfair taxes, you might get riots in the streets. Here, well, we’ll just find a way not to pay.

The black economy is already making a comeback. The article from 2009 says:

That would mean that, each month, over half a billion euro is generated that the taxman doesn’t ever get a penny of, or well over €1bn worth of missing-in-action VAT returns for this year alone. Brian Lenihan might find it very handy these days, amounting as it does to a quarter of what he has to find in the upcoming budget. This hidden economy could grow by a further €350m this year, or up to 0.9 per cent, Schneider predicts.
Everyone knows someone who’s been paid under the table. What better way to avoid paying back the debts of rich bankers? Oh, there are laws against it, but the Irish attitude to them seems to fall roughly in line with that of Mr. Bumble from Oliver Twist: “If the law supposes that, the law is an ass.” I will easily predict that the black economy will grow faster than ever in the next few years as people begin trading among themselves, outside the sphere of the government

It’s not a viable solution, of course. It’s certainly not going to do anything except destabilise the economy further, as less money goes to businesses operating legally. But this isn’t about economics, and there’s no such thing as ‘the greater good’ when it’s coming up to Christmas and you don’t have enough money to buy your child the present they want. It’s bloody minded tribalism all over again – but this time, it’s the government getting screwed. Whether the effects are ultimately ruinous for Ireland makes no difference; people will do it anyway to survive.

Future Imperfect

There will be no greater indictment of how the Dáil no longer speak for Ireland than if people stop paying their taxes. It would be a subtle rebellion; insidious, like a poison, and something that the government will not be able to stop. A default will not happen while the ECB have a vested interest in keeping Ireland afloat, so the main effect will be to strangle the Dáil and the supply of money going to run the country and pay the bankers’ debt. It will hurt us, long term, but in the short term it will keep a lot of people going.

But the future is still bleak for so many of us, even if tax dodging really does take off. Middle and lower income families will be hit hard by the reduction in child benefits and the minimum wage. With no more first time buyers’ relief, the dream of owning a home will be pushed even further away for younger workers. With the changes to business, entrepreneurs will feel the pinch and even fewer new companies will appear. The wealthiest Irish citizens are already paying the highest rate of tax, and they will not pay any more – and there are even some reports that they will gain a tax break overall.

A paltry cut in the Taoiseach’s salary and a €250k cap on public servants’ wages is pathetic. (There was also no mention of expenses – remember those? They’re still unvouched, meaning no receipts are required.) Cowen will take a reduction of €14,000 on his €200,000+ salary, and one can only assume he will not find it a stretch to support his family on what he has left. But for the person on minimum wage? Losing a single euro per hour is like taking a punch in the face; it amounts to a reduction of 11.5% of their income, and that cut is going to hurt. Cowen, in comparison, is losing only 6.1% of his, and I doubt he will even notice.

Don’t worry, though. They’re cutting down the number of ministerial cars, so that makes it alright.

Finding Hope

The most heart-breaking part of this whole play is the sense that people truly feel powerless in the face of this wholesale razing of their country; that people would rather emigrate, and join the Irish diaspora in forging a new life in a foreign land, instead of trying to fix the broken shell of their home. That is the true crime of the politicians and their friends in high business – despair, driven into the soul of a nation, the last nail in the coffin of what used to be a sovereign state.

But the soul of Ireland – ah, now that’s something a little different. That’s something that can’t be killed.

We are a small country, but we are a great country. Our culture survived seven hundred years of oppression; today it’s celebrated across the world on St. Patrick’s Day. We’re welcomed just about everywhere, and famous for our music, art, dancing and wit. We are the country of Oscar Wilde, U2, Newgrange, and Guinness, and one of the few places in Europe that the Romans never conquered. We’re right next door to a colonial superpower, and we fought them for the right to choose our own destiny. We are a country of myth, legend, magic and story; saints, scholars, warriors and heroes; the ancestral home of eighty million people; renowned for generosity, loyalty, and spirit.

We have a lot to be proud of, and it was not built by the likes of Brian Cowen. For all our ideas that Ireland is insignificant, and really doesn’t matter in the grand scheme of things, the truth is that Ireland has changed the world. We should never forget that. And so despite everything that has happened, and that will happen, I am still hopeful; I believe that Ireland will survive this, that we will survive this. In the blood and in the bone, we are greater than this one little island and the gombeen men who are trying to control it.

That is the final truth behind the veil of smoke and mirrors.

Eamon de Valera, addressing Winston Churchill after the end of WWII:
Mr. Churchill is proud of Britain’s stand alone, after France had fallen and before America entered the war. Could he not find in his heart the generosity to acknowledge that there is a small nation that stood alone not for one year or two, but for several hundred years against aggression; that endured spoliations, famine, massacres, in endless succession; that was clubbed many times into insensibility, but each time on returning to consciousness took up the fight anew; a small nation that could never be got to accept defeat and has never surrendered her soul?


Smoke and Mirrors: Corruption in Ireland

According to a report two and a half years in the making, Ireland suffers from a high level of “legal corruption”, where business and politics are too close for comfort. I would largely call this self-evident, and I’m sure just about any sensible individual here would think the same. High ranking politicians serve on the boards of high level businesses. Businessmen gain civil positions with relative ease. In many ways, the two are largely indistinguishable from each other.

The question today, at least, is not entirely concerned with the similarities between two different facets of the Irish elite. Let’s go back to the politicians, and see if there is a significant difference in corruption between the political parties. This largely means comparing Fianna Fáil and Fine Gael, although I will try to include the smaller parties where I can.

The Past

Since 1937, Fianna Fáil have been in power for roughly 40 years, and Fine Gael have been in power 23 years. (I will abbreviate them FF and FG.) FF were in power alone, for the most part – their first coalition government was with the Progressive Democrats in 1989. FG, in comparison, have never been in power without a coalition, normally with Labour.

Dr. Elaine Byrne has written much about the history of corruption in Ireland. Her article from Transparency Ireland has a brief description of the relevant law; in essence, she plots out a national sense of romanticism that took hold after independence, encapsulated in the idea that Ireland had such a high moral consciousness that laws were not needed to combat corruption. Self-regulation, apparently, was the way to go even when it was shown to have failed. Ireland only gained specific anti-corruption laws in 1995.

It goes without saying that FF have had the greater opportunity and means to be corrupt. But it is worth noting that FF have only been in power a little over twice as long as FG; should we see the same ratio of corruption between the two as well? That assumes all else being equal, which is not very likely, and measuring corruption is rather difficult.

Nevertheless, let us try to make some kind of comparison.

The Present

The first page list of a google search for “Fianna fail corruption” returns a full ten links which discuss or allege corruption on the part of FF. The third link is the FF Wikipedia entry. Of the list returned by the same search done for Fine Gael, the first two links refer to the same thread listing improper acts by FG. All other links are tangental, and do not discuss or allege corruption by FG.

The fifth link is, once again, the FF Wikipedia entry.

Running the same search for Labour and the Greens turns up nothing of interest, bar echoes of disgust that the Greens may have facilitated FF corruption in order to stay in power and Labour might do the same.

What we can gather from this is that corruption on the part of FF is far, far more visible than that done by other political parties, to the point where corruption is synonymous with Fianna Fáil in the Irish political sphere. It’s a rather damning situation when you consider that FF have only been in power twice as long as FG and others; as they say, power corrupts, and absolute power corrupts absolutely.


Instances of FF corruption have been well documented, so there is no need to go back over them again. Let’s look instead at FG – these are not all the instances I know of, but I believe they are representative.

In 1996, it was revealed that Michael Lowry had an extension to his house paid for by businessman Ben Dunne. He was also found to have taken payments for, once again, favours for wealthy businessmen in the best Irish tradition. He resigned from Fine Gael, became an independent, and (tellingly) now supports the FF government.

In 2001, Fine Gael were under inquiry regarding their taxes for a nine year period ending in 1995, and made a contribution to the revenue to settle all outstanding issues which cost over £111,000 punts. This was for “under the counter” payments to employees where they did not pay PRSI and other taxes.

In 2003, Liam Cosgrave resigned from Fine Gael when it became known through the Flood Tribunal that he had accepted donations to rezone land favourably to property developers. He pleaded guilty in 2005 to donations offence – that is to say, he did not declare donations where he was obliged to by law.

In 2009, Fine Gael councillor Anne Devitt was listed as a tax defaulter and paid €50,000 to the revenue as a settlement.

Something that I find very interesting about these instances is that the politicians in question resign or make reparations in every case. Liam Cosgrave and Michael Lowry left FG or were evicted, once it became known that they had acted in a corrupt fashion. Others paid what they owed, or in the case of Dr. Garret Fitzgerald, exhausted their assets to pay what they could.

Dr. Fitzgerald’s case is very interesting because of the specific mention of it in the Moriarty tribunal that compares him with his contemporary, the infamous Charles Haughey. From their report:

In summary it would appear that in compromising his indebtedness with the Bank, Dr. Fitzgerald disposed of his only substantial asset, namely, his family home at Palmerston Road, a property which would now be worth a considerable sum of money. As in Mr. Haughey’s case, there was a substantial discounting or forbearance shown in Dr. Fitzgerald’s case. However in contrast with Mr. Haughey’s case, Dr. Fitzgerald’s case involved the effective exhaustion of his assets in order to achieve a settlement whereas Mr. Haughey’s assets were retained virtually intact.

Fitzgerald received a loan from Ansbacher in order to invest in a company that subsequently went bust. He received the loan under more favourable circumstances than normal, it seems, but once the company failed, he did all he could to repay it and cooperated as required. This was after his involvement in Irish politics. Compare that to the massive financial misconduct of Haughey during his time in office, for which he fought the tribunals at every turn…

Although I can’t find any actual allegations of corruption in the Greens, there is a feeling that they share part of the blame for willingly going into government with FF, knowing as we all did that FF were corrupt, and allowing the train wreck of NAMA to take shape. Their actions are indicative of the whole mentality of ‘power at any cost’ that permeates Irish politics, and it’s worth noting here at least. The Public Inquiry blog predicts that they will leave the coalition soon, but I fear that the more power hungry members will keep the party there well past its due date.

I can’t find any allegations of corruption in Labour, and details on the same in the Progressive Democrats seem vague.

Politically Speaking

It’s worth noting how politicians feel about corruption, in general or in specific instances. Ivor Callely is a fine test case, although I tried to find a statement from Enda Kenny on him and I came up with nothing. (Perhaps I’m looking in the wrong places?) The Public Enquiry blog has done the work for us in compiling a list of statements from other various notable figures regarding Callely and expenses.

Two in particular stood out for me. The first, from FG Senator Regan:

I think this is an important issue, an issue of fraud by a member of this house.

He was immediately asked to withdraw that statement, and did so. The second, from FF/Independent TD Jackie Healy Rae, regarding the fact that he travels to and from the Dáil with another TD, and whether one or both of them claim expenses:

I know my own business and I won’t be declaring it to you or anybody else.

Do look at that full list, if you can. It makes for very interesting reading. What really stands out about these two statements is what it says about their parties, when you examine them a little closer.

On one hand, we have Fine Gael – a party led by a non-entity and apparently composed of politicians who cannot stand up for their own opinions for fear of losing political capital. Senator Regan expressed a valid opinion which has a quite solid base considering what we know so far about Callely’s actions. A Seanad committee found that he had intentionally misrepresented where he lived in order to claim over €80,000 in expenses, and he’s responded by trying to block any investigation. Believe it or not, there’s another word for when you intentionally misrepresent information for monetary gain, and that word is ‘fraud’.

On the other hand, we have Fianna Fáil – a party of arrogance and zero accountability that wavers between open hostility and twisted evasion of the public’s questions.

Other quotes from the article are representative, I think:

“Apparently he (Callely) is hunting for a get out clause. I think it’s all very nauseating and awfully bad for the body politic and it’s wrong, wrong, wrong.”

“The answers that have come forward to date are not very clear. Senator Callely has to explain the situation to the Senate Committee… There are certainly serious questions being asked and I believe he should be absolutely up front and clear about it.”

“I’m very conscious listening to the discussion so far that the Irish public is listening out there very, very worried and probably incensed… They’re not understanding some of the language that’s being used -vouched, unvouched etc and I think it’s very confusing.”

And where would we be without a quote from the Taoiseach? Brian Cowen has said that Callely should ‘consider his position’, and it seems that he will not ask him to resign from the Seanad because it could be embarrassing if he refuses. Could we hope to be treated so gently if we were under investigation for massive fraud? I think not.

Other quotes in that article are typically wishy-washy. Only Senator Doherty from Sinn Féin had the balls to call out another politician directly, when he questioned why FG TD Dinny McGinley was claiming so much more in expenses for traveling the same distance as him. No one – no one– condemned Callely for his actions and the damage he has done to the trust between the government and the public.

Between a Rock and a Hard Place

The conclusion that I would draw here is that not all political parties are created equal in Ireland when it comes to corruption – but we still have no real options if we desire to vote for a truly capable, honest party.

Fianna Fáil have shown themselves to have a culture of systematic legal corruption, where it is silently tolerated or encouraged as long as it does not cause the party to lose face. I think it’s clear that any political party that puts its own image and power so far above the needs of the country is not fit to govern.

Fine Gael have shown themselves to be more honest than Fianna Fáil, but that they are still worthless as the opposition. Honesty counts for little if the political party in question is completely unwilling to rock the boat or call their opponents out for their mistakes and crimes; such a party does not have the courage or will to govern.

Labour, the Greens and others are largely non-existent in the face of FF and FG, probably due to their respective party sizes. So, we have a choice between the corrupt, the less corrupt-more honest-but largely spineless, and the gamble that somehow Labour would be able to cobble together a working Dáil from everyone left over.

The Future

It will take a massive paradigm shift in the consciousness of the Dáil, and indeed the voting Irish public, to really put a stop to legal corruption in Ireland. It could also take a huge amount of luck if enough non-FF/FG politicians were elected to create a new, unknown and untested government, and if that government were really committed to the ideals of transparency and accountability. Could Labour deliver that, knowing the Greens sold their soul to get into power once? Maybe they could, if the alternative was corruption on a grand scale by the strong, or corruption on a minor scale by the weak.

This, however, would not be something I’d bet on. I feel for every honest politician in Ireland, from every party. They are sorely and completely outnumbered, and they will have their work cut out for them if they want to effect real change.


Smoke and Mirrors: Politics, Anglo Irish, and what the Bailout will do to Ireland

Smoke and Mirrors

Corrupted politics have been the status quo in Ireland for many years. From Haughey to Ahern, tribunal to inquiry, even from scandal to ever greater scandal, it’s clear that the land of saints and scholars is not being run for the benefit of the people. Indeed, save for a few honest individuals, it’s being run by the powerful elite for their own benefit – and we, the ordinary heart and soul of a nation, are being made to suffer while they feast in luxury.

Ivor Callely is a symptom of the cause. As Bock has pointed out, he has been suspended from Fianna Fáil for his actions where other politicians from the same suspect party have been quietly tolerated after committing far worse acts. The Mahon Tribunal, for example, depicts a sprawling mess of backhanders, favours, and dodgy dealings; Beverly Cooper-Flynn, a proven facilitator of tax evasion, was allowed to rejoin Fianna Fáil. The disease, however, remains the same. The politicians of Ireland act with impunity even in the face of scandal, because if history has shown them anything, it’s that they can still be elected as long as they please the right people.

It’s all smoke and mirrors, at the end of the day. I don’t doubt that there are some TDs that got into politics out of altruism, but the pathetic reality of Ireland is that the majority of our elected representatives are corrupt – especially Fianna Fáil – and it is only a matter of the degree to which they can be bought. The worst of them desire nothing other than to get into power, and hold on there as long as possible. Power means a huge paycheck, an enormous expense tab, and the fawning attention of other members of the Hiberno-elite who know that you can tug the reins of the country in their favour.

The Boom

2006 was the year of the property boom, when house prices all over Ireland hit the highest they had ever been. Between 1996 and 2006, prices had doubled or tripled due to the roaring of the Celtic Tiger; wages were up, credit was available in the expanding mortgage market, and people bought based on the assumption that their house was a solid investment, one whose value would not fall. Where there is demand, supply will increase to match it – and so enter the property developers, who needed loans to build houses and the compliance of the local government to keep regulations out of their way.

A report by the National Institute for Regional and Spatial Analysis has condemned the government as the final cause of the bubble. From an article in the Irish Times in July:

In a 66-page report into the crisis, Nirsa lays blame for the property boom and bust squarely with the Government and local councils. It says light touch regulation and tax incentive schemes administered by a political system infected by those in power favouring friends were the chief culprits. Planning guidelines, regional and national objectives as well as proper assessment of demand for housing were ignored, it claims… …A home-grown “litany of systemic failures” that allowed the over-development and re-zoning of too much land will see housing lie empty in some areas for more than a decade.”

The reports of the Mahon Tribunal released in 2002 showed quite clearly that politicians were taking bribes from property developers. Perhaps then, in retrospect, this particular report should not shock us. But what is quite surprising is that the evidence of corruption was ignored, for the most part, and Fianna Fáil were re-elected to the government in 2007 despite questions being raised about Bertie Ahern’s involvement in those same bribes – questions, by the way, that led to his resignation a year later.

Parochial politics at its finest. It is clear that the Irish people are happy to elect crooks, as long as the crooks keep them happy in small, trivial ways. But it’s still an illusion; the crooks take money from their pocket, keep prices high, and leave them hurting for jobs, and it’s all hidden behind the veil of government bureaucracy.

The Bust

Some economists saw what was happening in the property markets and warned that it couldn’t last. It was never going to, really – ours was not the first housing bubble in the world, nor will it be the last, and the result is mostly the same in all cases. Eventually the prices collapse, and those who have bet too riskily suffer a serious loss of equity. The Irish property developers who connived with the government and massively oversupplied the market deserve that loss – but this is not a just country, and there was no reason for them to lose all that money when their pet politicians could make it all go away.

Anglo Irish was their bank. When the bubble burst and demand vanished overnight, the developers were left with thousands of empty and unfinished properties that they had borrowed heavily to build. These are the ghost estates; acres of houses and apartments built on the assuption that they would be sold for an astronomical price, and with that money the loans could be paid back. Without demand, they became worthless, while the developers were still on the hook for the loans. On the other side of the equation were the investors who were now owed vast sums of money – who were they? We already know the names of four of the Golden Circle – the ten businessmen who bought a 10% stake of Anglo Irish using money raised from its own shares – and we know they had connections to Fianna Fáil. They were not alone.

Money lost on both sides, and it seems that the property developers were listed among both. They had a problem, one that would need billions of euro to solve.

Enter Fianna Fáil, the major player in a “political system infected by those in power favouring friends”. They had a history of corruption. They had links to the Golden Circle. Sean Quinn, who was among one of Anglo’s biggest shareholders, was friends with Bertie Ahern. They had control over the budget of Ireland, and all they needed was an excuse.

Everything that has been done to Anglo has been for one purpose – to keep the bank afloat, no matter what it will cost the nation. It’s all a matter of misdirection and obfuscation; start small, say it’ll only cost so much, say this is the best option because it’ll ruin us to let it fail. Then little by little, make the public accept that which would be unthinkable. The final debt for Anglo’s life support may be €33 billion or more, which we probably will never get back. That debt includes a loan of €11 billion given to Anglo Irish based on highly risky property loans – collateral that the European Central Bank could not accept, which forced the Central Bank here to step in to save it.

Do not believe, not even for a second, that this was necessary. Gavin Sheridan noted the following quote on his blog, taken from Ireland’s note to the European Commission regarding the recapitalisation:

Anglo Irish Bank is a focused business bank with a private banking arm. The Bank provides business banking, treasury and wealth/management services. It is not a universal bank and its stated strategy is niche rather than broad market. Each of its customers deals directly with a dedicated relationship manager and a product specialist.

Niche. Oh, yes.

The Recovery

€33 billion is a huge number. After a certain point, it all becomes unreal and fantastic. Steal a tenner from a man in the street, and his rage knows no bounds; steal 2% of his wages every month, and he may not even notice. It’s all about taking from the places where no one will look, or where people will grumble the least without realising the extent of the damage to their lives. It may be legal, but that doesn’t make it right.

€33 billion, the cost of Anglo Irish alone, is more than the total revenue that the government will get from tax this year. The current national debt stands at €84 billion. In order to keep the country going this year alone, the government will have to borrow €18.5 billion from somewhere. As more money is poured into the dead bank, and more money is borrowed simply to run Ireland, that debt will accelerate out of control. The Budget for 2010 announced savings of €4 billion, but that may not be enough; the debt still rises, as making savings of €4 billion will not balance out borrowings of €18.5 billion. With a higher debt comes higher interest payments on that debt, which must be paid, leaving less money to run the country and a greater need to borrow. The government seems to be unwilling to stop giving money to Anglo Irish, so the cost of running the country must be reduced somehow – and that means bleeding the ordinary citizens of Ireland dry.

Of course, it won’t be the politicians who suffer. Even after the wage cuts for civil servants in the Budget, Brian Cowen is being paid €220,000 a year. Ministers are paid roughly €190,000 a year. The entry level salary for a TD is €92,000, with the average being €110,000 – expenses not included, of course. We can only dream of being so well off, so pampered, for a job that is essentially part-time, especially when (as Bock has pointed out before) there’s no qualification requirements other than being able to convince enough people that you’re a pretty swell guy who can do things for them. And after that, of course, bloody-minded tribalism takes over and the people will re-elect you simply because you’re ‘their lad’.

Smoke and mirrors. It always comes back to that. It’s ok to screw over your country because, well, you’re helping a few friends who helped you out a while ago. You can’t say no, because his father always drank with your father, and sure didn’t he donate a load to the party and he’s not asking for much in return. And you can hide it just enough so that no one will say anything, or you can spin it so that no one will listen, and anyway you’ll be getting a pension at the end of it and the money won’t be your problem anymore. This is Ireland, isn’t it? Half of the sheep admire you for getting away with it, and the other half don’t care. All you have to worry about are the few friends who did you a favour, and then another, and then another, and didn’t ask much until now, and where’s the harm in selling a little more of your soul for a lot more money?

Someday soon, there won’t be any more money left to take. In the cold, hard light of day, bereft of smoke and mirrors, it’s all a game of numbers on which the crooks of Fianna Fáil are gambling the economic future of generations of Irish citizens. Forget Ivor Callely; he’s another distraction. Watch the actions of NAMA, and the politicans who swore it was the best thing to do. Watch the wealthy elite who have a stake in Anglo Irish.

At the next general election, do not be fooled again.

Bock's People

New Contributor

I’m happy to welcome a new contributor, Claire Ryan, who normally lives HERE.

Tomorrow, Claire will be analysing the bank bailout scam more thoroughly than you’re used to seeing here, but I hope she’ll also be writing about the other creative stuff that floats her boat.

The Bock Collective grows apace.  Resistance is futile.