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Saturday, December 26, 2009

From Celtic Tiger boom and bust to the boom in books




There has been a lot of attention on the large number of books on the boom and bust of the Celtic Tiger, which have been launched for the Christmas selling market.

Independent senator, Shane Ross, appears to have hit the jackpot with his targeted subject of Irish bankers' central role.

Ross' book, The Bankers, is about the people who ran the banks - - chief executives, chairmen/chairwoman - - as distinct from other senior managers and directors who nominally had roles in running the organisations but in practice went with the flow.

Be it politics, the senior public service, business and religious organisations, that is the default pattern because it is the reaction that generally pays -- recessions and busts are rare events that lead to questioning of the insiders in a society.

Simply, in the money economy, the individual who takes a public stand against conventional wisdom, is usually the loser.

Last June, in an article on Finfacts, I asked: "Why did so few shout stop? There is a simple answer. Challenging conventional wisdom often comes at a high price and the whistleblower is more often than not the biggest loser. Any amount of legal protection will not change this reality across the globe. However, a society needs to have dissidents, to evolve."
The imbalance between self-interest and the public interest is often at the root of economic and business crashes.

Harvesting public anger is an old trick in politics and it is common for angry people to gullibly bank their hopes on the proverbial snake oil salesmen.

Some of the recently published books on the Irish economic crash, add some knowledge or focus on pertinent issues but it's also important to remember that self-interest is also at play here.

For example, the Prime Time Investigates programme, which last Monday, on the State broadcaster RTÉ, focused on bankers, is very unlikely to examine mismanagement in its own organisation - - including not only excess boom pay for so-called "star" broadcasters, but also for senior management - - even though it is an issue of public interest because of the compulsory licence tax/fee.

The programme also made a passing mention of former chief executive of Irish Nationwide Building Society, Michael Fingleton, giving special treatment to journalists in return for exposure on RTÉ and the newspapers, but it was the issue of his express processing of loan applications for politicians, that received in-depth attention.

It has been said that Shane Ross, who is business editor of The Sunday Independent, is very tough on public company boards with the exception of the board of the newspaper's owner.

Of course life involves compromises but it is a relevant point to make.

In September 2000, the then Sunday Business Business Post journalist Emily O'Reilly lambasted Ross for what she termed the former stockbroker's pitching of the shares in the public floatation of State-telco Eircom and later heading a public crusade against the company.

O'Reilly wrote: "Ross has made a virtual third career out of board bashing. As business editor of the Sunday Independent and part-time commentator on Today FM's Last Word programme, he and presenter Eamon Dunphy have developed a neat double-act. Outrage is the theme as the two handsomely paid media buddies rail against the handsomely paid business buddies on various company boards."
O'Reilly herself showed that she was another insider like the wealthy Shane Ross, and she hit the earnings jackpot when she was given the job of Ombudsman, which was a patronage plum in the gift of Minister for Finance, Charlie McCreevy. Her salary was hiked four or fivefold, to the level of a High Court judge.

Economist David McWilliams in his newspaper columns also mainly focuses on the banking crisis but he has noticeably refrained from taking a stand on the issue of public/private sector pay as if he does not wish to risk his appeal, for a section of the public.

 The public should bear in mind that the authors of the current round of books on the crisis, are generally well-connected and like the many in the supporting role of the Celtic Tiger crash, would unlikely take principled stands that would endanger their earnings potential.

A reader of the Irish Independent let rip at one of the recent articles on bankers: "I see that David McWilliams' latest analogy to explain the easy credit foisted upon us all by the evil bankers is one of drug dealers peddling their illicit wares to unwitting low-end junkie addicts (Irish Independent, December 23).

Believe it or not, most of us normal folk actually do have the capacity to comprehend such far-out concepts as 'banks' and 'credit'.

This constant dumbing down of his is becoming as tiresome as it is insulting. Please ask him to stop."

The story of the crash is a lot more complicated than the imagery of selfless heroes bringing dastardly villains to account, on behalf of a population of victims.

Indeed, the victims seldom merit the interest of trade union leaders or commentators.

It should be about a people who have for too long tolerated a broken political system with limited accountability and where the buck appears to stop nowhere.

Unless the process is changed, there will be further economic mismanagement in future and more material to analyse for generally wealthy journalists.

Finally, in due course, it will also be interesting to note how many of the authors who have set out to show how the Irish economy was ruined by a corrupt system that evolved to protect insiders and promote crony capitalism, will take an advantage of the 1960s era tax break for indigent artists and apply to an Inspector of Taxes, who has the odd job of deciding if factual books are works of "artistic merit."
David McWilliams - - a short-termist like his Celtic Tiger villains?

1 Comments:

  • Hi Michael

    Well written!

    It is in fact a GS, general service grade, person who decides on literary merit, in Dublin Castle, not an IOT. The qualification for the exemption is not too high, I believe.

    I see Mr Reynolds did not take it!

    Miss you on Irisheconomy.ie

    The MS survey is horror reading. Why are people so happy to let the bondholders rape our future?

    By Blogger Fungus FitzJuggler III, at January 10, 2010 6:37 AM  

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