What The Hell Is Wrong With Us?

Front Page of the german Newspaper Süddeutsche...
Front Page of the german Newspaper Süddeutsche Zeitung 2009/05/20 (Photo credit: Wikipedia)

If you care – or are just curious – about what’s happening in Ireland now, economically and politically, you could do a lot worse than ask a German. Not any German of course, certainly not Angela Merkel, but one Christian Zaschke, who wrote an article for the Süddeutsche Zeitung aptly titled “Conned“. (Translated and republished here by the Irish Times.)

In it he makes a clear connection between Ireland’s erstwhile banking and future oil wealth. One has the potential to provide a solution to the problems created by the other, but it’s likely to be stolen from us just as the first was, and by the same route: Corruption. More precisely, our strange pervading acceptance of that corruption.

Is this over-simplistic? No, it’s just refreshingly direct. We may wish to say in reply that it’s more complicated. We may be deeply intellectually concerned here with the reasons behind why we are so supine in the face of corruption: colonialism, Catholicism, conformity, clientelism, Celticness, corporate capitalism – that’s just the Cs – but it really doesn’t matter what the cause is. The important thing is that we are being supine in the face of corruption. We need to stop.

Smoking Tape

AngloSo the “Anglo Tapes” – internal phone recordings made during the last days of Anglo Irish Bank. Do they constitute a smoking gun?

Hoo boy, you betcha. A smoking gun, covered with bloody fingerprints, with a note taped to the barrel saying “For doing the murder with”.

This is the stuff.

I have to admit I was a little dismissive when I first heard of this, much as I couldn’t quite believe all the fuss over the PRISM revelations. (“You mean you believed US intelligence forces didn’t spy on whoever the hell they liked?”) We all knew that Anglo had ripped off the nation. Had, as the Indo bluntly put it, “cost Ireland our sovereignty“. But we also knew it was done with nods and winks and complicity, screened off by tendrils of loyalty and friendship. These people don’t leave evidence.

But that really seems to be what we’ve got here. The tapes record senior – very senior – management explaining a strategy of lying about the severity of the bank’s situation. They knew that if they revealed the full picture, government would see little alternative except to let the bank fold. They cynically calculated that if the State was tricked into giving a few billion of support at first, it would be forced to follow up with more and more in a frantic effort to save its investment. Which is precisely what happened.

They cheated the State in order to try to save their wealth and positions, cheated it of billions and billions. And when I say the State of course, I mean you and I. People who pay tax, people who rely on the State to support and protect them. Everyone in the country, in other words. We were all robbed by this, quite deliberately.

We shouldn’t oversimplify. This doesn’t let the other lenders and speculators off the hook for stoking the property boom, exonerate the politicians in Fianna Fáil (and elements of the media) who were complicit in the bubble, or mean that the euro was not grossly mismanaged. Anglo’s rooking of the public was certainly not the only cause of Ireland’s economic demise. But these men tricked the country into taking on billions and billions in debt. Billions that could have gone to creating jobs or equipping hospitals.

And there are tape recordings of them saying how they did it.

One does not want to prejudice any possible legal proceedings, so to be circumspect… Wait, what was that? Sorry, I thought I heard something. Probably thunder. Though it sounded even more like a long corridor of cell doors clanging shut.

Westport – Best Place In Ireland?

On Saturday I drove to Westport, a pretty little town in the north-west corner of the country dating mostly from the 19th and late 18th Centuries. I was here last year to walk up a mountain, but this time was a lot more leisured.

Westport recently won a competition for the best place to live in Ireland. That means we have to hate it now. But you can see why.

In the 18th Century redesign the town was constructed around the river, with pleasant tree-lined walks along either side, humpback stone bridges, and weirs.

Matt Molly is one of the most respected flautists in Irish traditional music, and the pub he owns in Westport is an absolute classic example of the Irish pub genre.

If boots are your thing, they have boots in Westport. Moran’s shop in fact has boots literally hanging off it.

Westport’s layout is surprisingly complex. It has two junctions that you might take for the centre, both attractive enough to grace a town of twice its size or more. One is octagonal. This one has a peculiar clock.

You don’t see phone boxes like this anymore. And even if you did (which you don’t), you certainly don’t see them in green. Contrary to the mental images of some, phone boxes in Ireland where not painted green for many decades, certainly not in my memory. I expected an Irish Doctor Who to step out of this thing.

OK, letter boxes are green.

A sweet little back alley.

A handy graphical overlay guides tourists around the town and its environs. Shown here, the route to the scenic coastal resort of Loading Bay.

What If We Voted No? Your Questions Answered

Irish Times clock on the new building at Towns...
Sign Of The Times. Geddit? God I’m Stuck For An Illustration Today

Yesterday’s post about Ireland’s alternatives to the ESM elicited such a bunch of interesting questions it would really take all day to answer them properly. So that’s what I’ll do.

Ciarán Ferrie of Ireland pointed out:

I found a disturbing little nugget in the fourth paragraph of Paul Gillespie’s opinion piece in the Irish Times on Saturday – In effect, if we vote NO to the treaty, not only will we not be able to draw down funds from the ESM but we will still be obliged to contribute to its initial capital. I think Vincent Browne may have alluded to this double-bind on his show a couple of times but I’m only just realising the implications of it.

I’m assuming that this was agreed before the AG dropped the bombshell of the requirement for a referendum and that the government had assumed they could push the treaty through the Oireachtas unchallenged. Whatever the reasons it puts us in an invidious position with regard to the ESM in the event of a NO vote.

True, but having a chance to claw back what we pay in is hardly a good reason to vote Yes. Really, this is a much better argument for not ratifying the ESM treaty at all.

Which is still an option (even leaving aside the Pringle case, which may yet decide that they can’t ratify it without another referendum), and I think this amendment failing would provide the government with the perfect pretext not to.

They may well do it anyway though – to bolster Ireland’s boy-scout europhile reputation (what good did that do us again?) and to not rock an already waterlogged boat. €1.27 billion over the next three years seems almost like small change compared to our deficit. Though of course that does rather overlook the fact that we’re liable for anything up to €11 billion – in the unlikely event of anyone, you know, actually needing a bailout.

Regular reader Azijn from The Netherlands said:

You mention several times that under the ESM you wouldn’t be able to “invest in growth”. I don’t really understand what you mean by this. What is the precise ESM policy that prevents this? I thought it was mainly a severe constraint on the budget, with very strict rules about the size of deficit spending. (Just like the IMF would).

To deal with this bit first: The EMS – or more correctly the Fiscal Compact we must join to enter it – will compel us to cut government spending at nearly twice the pace we’re already slashing away. Even leaving the immediate human cost aside for a moment, this will have the effect of further shrinking the economy, further reducing the tax take… A vicious cycle looms.

The way to break that cycle would be to borrow and spend as soon as possible to stimulate growth; classical Keynesianism. The IMF – or of course commercial lenders – would have no ideological objection. The Fiscal Compact however requires that, with some leeway for cyclical fluctuation only, governments borrow no more than 0.5% more than income. In other words it bans Keynesianism in perpetuity, for no better reason apparently than German mistrust of it (as I discussed here).

Aside that, you provide a very clear analysis of all the options. It’s sadly clear that all the options, including your preferred one, have major downsides. There’s no silver bullet for the economic problems of Ireland. Or Europe, for that matter.

Especially, because it’s not just conjuncture and aftermath of the mega-losses in the housing and financial markets. A big problem is that while all this is going on, all European countries are concurrently facing the huge (huge!) increases required to simply keep up expenditures in healthcare and retirement funding.

That’s where the biggest pain of ‘austerity’ is felt, but I always find it a tough topic. On the one hand, it’s easy to depict those cutting in the healthcare and retirement budgets as “robbing the sick and elderly”. On the other, it’s a reality that these (often overlapping) groups are experiencing skyrocketing costs.

If any of the “nuclear” options, such as leaving the Euro are chosen, these people will _still_ be among the hardest hit. Also, is it fair to ask younger generations to display solidarity for the elderly, but not ask it all of the elderly?

Well I’m seeing it quite differently. The sick and elderly are my highest priority, and I wouldn’t be suggesting these nuclear options unless I thought they would be better for the vulnerable in society than the merciless constraints of the Fiscal Compact.

Our economy is healthy by the measure that matters most – balance of payments. We ought to be able to raise more money to prevent the sick and elderly getting the brunt of this. To a great extent, it’s Euro membership that is tying our hands. A major factor scaring lenders off now is the possibility that the Euro could collapse, or that we’d crash out of it. If we get that over with, we suddenly become a far more attractive risk. (And of course, our balance of payments gets even better.) It would be hugely disruptive and scary, but very probably preferable to slow economic constriction.

I don’t know what you really mean by solidarity on the part of the elderly though. We’ve already raised the retirement age, I’m not sure what more they can do. Unless you’re subtly suggesting we try legalizing assisted suicide here…

I answered this one yesterday, but I include that here, with a little expansion, for completeness. Hilary Chapman (no known relation) from the UK asks: 

Would it not be best for Ireland to share the currency of Northern Ireland, Scotland, Wales and England, i.e, the pound / punt? Ireland’s economy is so tied up to that of its near neighbours that the euro is an aberration.

That would be a hugely retrograde step. The old Irish pound was pegged to the UK pound from independence until the mid-70s – not exactly an era of sparkling economic performance. A currency union tended to steer business towards or through the UK, only exacerbating the geographic disadvantage of having a larger country effectively sitting between us and the wider world.

So the general thrust of policy for decades has been to untie the economy from our nearest neighbours! Mainly, by finding new trading partners. (And whatever about its downsides, the Euro has definitely been a help in this.) Decades of separate development have made the UK’s importance for trade much smaller than you may think.

You will see shops in Ireland full of UK brands (and indeed, high streets full of UK chains); we certainly do still import a huge amount of retail goods from there. But that may give a misleading impression. From getting virtually 100% of our imports from the UK at independence, we now source less than a third there. In exports we send more goods to the Eurozone, and the US has long overtaken the UK as our single biggest customer.

We may have troubles right now, in other words, but there’s really no going back.

*      *      *

If we do leave the Euro we would first of all devalue significantly of course – but then I think we’d start shadowing it again, with a view to eventually rejoining. I would certainly prefer though if we could rejoin – or stay in – a much modified Euro. One better geared for the benefit of the EU as a whole, less engineered for Germany’s particular insecurities.

I do sincerely sympathise with German concerns however. Inflation, in post-crash circumstances not so different from those now, is seen as a major contributing factor to the collapse of democracy in the 1930s. But preventing the currency inflating doesn’t make the causes of that economic dysfunction vanish. In inter-war Germany, these were largely the heavy burden of debt and restrictions on self-determination imposed on the country by its neighbours, whereas now…

Hmm.

State Media Silent On Dana Allegations

Picture of RTÉ Studios in Donnybrook
Not Quite Perpendicular?

RTÉ, the Irish state broadcaster, seems to be refusing to report the substance of the allegations against Presidential candidate Dana Rosemary Scallon‘s brother.

This scared me half to death when I heard the news this morning. You see in Ireland we have some quite stunningly repressive libel legislation. How else could so many politicians have gotten away with so much? It did appear that this blog was the first here to relay what was being reported in the US, and when even the state-owned broadcaster didn’t dare repeat the answer to the question the whole country was asking, I had a horrible feeling that I must have overstepped the mark. Just how much would I be liable for? So it was with enormous relief that I saw the Irish Times today.

They at least followed suit after the IrishCentral scoop – so quickly and thoroughly in fact (Colm Keena’s background report is excellent) that I suspect they had the story prepared but didn’t want to be the ones to break it. The Irish Independent meanwhile, supposedly the leading quality broadsheet, coyly states only that there have been accusations of a sexual nature against a member of Dana’s family – nothing she hasn’t said herself. It all adds up to a picture of some pretty craven behaviour on the part of the Irish media.

RTÉ may at least have the excuse that as a national broadcaster they are bound by charter to be scrupulously fair to candidates. But when that reaches the point where they cannot report allegations which are now known publicly – as I write they are still saying only that she is upset by “media coverage about a family member” – it becomes pantomime. What’s more it now favours her unfairly, because their flagrant censorship lends weight to her apparent conviction that she is the victim of media persecution.

Which is ironic, to say the least.

‘Vile’ Dana Allegations Finally Revealed

Happier Times

So according to a story just broken by IrishCentral.com, the “vile and false” accusation against a member of Dana Rosemary Scallon‘s family is that her brother – and campaign advisor – John Brown sexually abused their niece.

Pretty vile all right, and from an odd source. No complaint or charge of sexual abuse appears to have been made. The accusation comes from legal testimony given by the father of the alleged victim, Dana’s brother-in-law Dr. Ronald Stein, during the legal wrangling between the partners formerly involved in Dana’s record label. (Heart Beat Records, a “Christian music company the family had established in the U.S.” as IrishCentral describes it.) However he appears not to have accused Dana’s brother of the crime so much as claimed that he confessed to it.

It has to be emphasised that we have no particular reason to believe the accusation. Possibly the testimony by Stein is a fabrication made during a very nasty battle to control a lucrative family business. This is what Dana herself appears to believe, and as the Irish Times reported, the judge in that case said that “no witness spoke only the truth.”

Will this affect her campaign? In fact I think it could do her more good than harm. Unlike the loosely comparable issue dogging Senator David Norris, her brother has not apparently been convicted or even charged with anything, and the full extent of Dana’s involvement, as far as we know at this point, was to try to keep the allegation off the record and out of the papers. That may have been ultimately a foolish move – if an allegation is baseless you inevitably lend it credence by attempting to suppress it – but she doesn’t appear to have done anything at all improper. Then there is the issue that will inevitably follow on. Was some journalist really using this information to threaten her, as she seems to believe? If it can be shown (or made to look like) one was, then she has a sympathy vote coming.

I doubt if it is true though. It seems more likely that she perceived, or wished to characterise, any questions about these allegations as an attempt to undermine her campaign. But she should not pretend, even to herself, that such an allegation made in court is of no legitimate interest to the electorate. The biggest mystery here is how it did not come to light until this late stage.

Will it effect the outcome of the election? No, not at all. She was quite clearly not electable anyway.

Another Presidential Assassination

Banner of the Irish Blueshirts.
You mention Fine Gael and far-right militants in the same article, and the automatic image search comes out with the Blueshirt flag. Stop editorialising, image search.

Could Norris have won? No, not now. He was the fun candidate. I am not saying he wasn’t a perfectly serious candidate as well, but he more than anyone else stood for liberation from tiresome, hopeless, party-controlled politics, and if he was going to be elected it would have been on a wave of joyful voting against the establishment. The sheer fact that his ex-partner had committed rape was inevitably going to take the wind out of that.

I wish he had been allowed to continue though. I’d like to have voted for him, if only to say that what he did wrong was forgiveable.

If indeed he did something wrong. From reading the actual letters (PDF) he sent to Israel, I don’t think he represented himself as speaking on behalf of the Irish people or government, or even his constituents. The only part that seems to have been on official Senate paper was the brief and rather bland character reference. The long, detailed plea for leniency appears to have originally been a separate document sent in a personal capacity.

The question of whether he should have pleaded for leniency at all in such a case remains, and I think that was a mistake for a person in his position. But I wouldn’t want to vote for someone who never did a stupid thing for love.

So now, bizarrely, it’s Gay Mitchell’s turn. He’s the candidate of Fine Gael, the party leading the newly-elected government, and so very arguably the favourite since Norris’s departure. Mitchell too made an appeal to a foreign judiciary, in 2003 when he was FG’s spokesman on foreign affairs. His though was for a man due to be executed for the murder of a doctor and his bodyguard, outside an abortion clinic in Florida.

Mitchell says that it was in the context of a consistent campaign against the death penalty. All I will say is, it had better be.