Time magazine reported in April 1973 that the Nixon Administration had
developed a new language—a kind of Nix-speak. Government officials were entitled to make flat statements one day, and the next day reverse field with the simple phrase, "I misspoke myself."
White House Press Secretary Ronald Ziegler enlarged the vocabulary in that month, declaring that all of Nixon's previous statements on Watergate were "inoperative." Not incorrect, not misinformed, not untrue —simply inoperative,
like batteries gone dead.
Time said euphemisms notwithstanding, the Nixon Administration's verbal record on Watergate was enough to turn ardent believers into skeptics.
In Ireland's small insider elite, flip-flops may take longer than a week but a brass neck can work wonders because other insiders are afraid to challenge hypocrisy directly. Who knows when one may need a back scratch some time? After all, it's a country where resigning on principle is viewed as bizarre; the concept of conflict of interest hardly exists; local councillors with commercial property interests can vote on land rezoning decisions and the State broadcaster, RTÉ, has publicly declared that there was no problem with its highest paid staff getting free luxury cars from private companies.
Tammany Hall here we come in the land where for some, the buck stops nowhere!
In the recent Irish general election campaign, Alan Shatter, now Minister for Justice, challenged rival candidate Senator Shane Ross over the claims in the latter's election literature that he had ‘‘a 15-year record of challenging bankers.’’
Ross has been both a politician and business editor of the Sunday Independent and has delivered a book, 'The Bankers,' to the angry mob looking for a tooth for a tooth.
The floatation of the Irish State-owned telco, Eircom, was the first big manifestation of tulip mania in the Celtic Tiger period and in September 2000, the then Sunday Business Business Post journalist Emily O'Reilly lambasted the then Senator Shane Ross for what she termed the former stockbroker's pitching of the shares in the public floatation 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."
Alan Shatter challenged Ross about his praise of the two most notorious
bankers of the bubble: Seán FitzPatrick of Anglo Irish Bank and Michael
Fingleton of the Irish Nationwide Building Society.
Ross took the prudent course and ignored Shatter's bait as this non-response as usual worked wonders in conservative Ireland. The anti-banker Ross headed the poll. All his previous statements had become "inoperative."
As a newly elected TD for South Dublin, Ross is a scourge of nefarious
bankers and is advocating Irish default.
Vying for populist appeal where inconvenient truths do not have to be told, is celebrity economist David McWilliams.
McWilliams has claimed to be an architect of the September 2008 calamitous blanket bank guarantee that ranks as one of the most inept but consequential decisions made in the history of the Irish State. He too has reinvented himself as a spokesperson for the economically illiterate and now distances himself from the guarantee that he once termed a 'masterstroke.'
Dr. Conor McCabe, a historian, has published a devastating critique of the populist chameleon.
McCabe challenges apparently made up 'facts' in the book 'Follow the Money' and he adds: "The footnotes, though, pale into insignificance when compared with the attitude, analysis and conclusions which are presented to the reader. ‘Out in our new suburbs, a new generation - the Juggling Generation - is sinking under the weight of huge debts, negative equity and the trauma of failure’ writes McWilliams.
This is a mere four years since McWilliams opened up The Pope’s Children with the line: ‘Ireland has arrived.’
In that book he talked of little else but the new generations and the profound changes Ireland had undergone in the previous 25 years. Now, 48 months later we have a new generation. Not even The Borg could regenerate that quickly."
Bankers are not the only ones who are running away from their past.
Conor McCabe: David McWilliams: Merchant of Guesses
Sunday Business Post: Shatter critical of Ross election claims
Irish Times: Shane Ross, Alan Shatter, Dublin South and the banks
| The median across 12 advanced countries of government-guaranteed debt issued by banks is about 6% of GDP. Ireland was the outlier in 2009 with a sovereign exposure of 55% of GDP. |
The issue of ECB President Jean-Claude Trichet and the Irish State bank guarantee of Sept 2008,is reminiscent of arguments about London-Dublin cable traffic during the Treaty negotiations in 1921. The main story of course was why the head of the revolutionary government had decided to stay in Dublin not communication problems.
There was no official ECB policy in Sept 2008 on issuing blanket guarantees and neither had EU finance ministers promoted it.
Ireland was the ONLY Eurozone country to issue a blanket guarantee and a week later Denmark made a similar move.
According to the IMF, the median across 12 advanced countries of government-guaranteed debt issued by banks during the crisis or in the case of Denmark/Ireland including existing debt, was about 6% of GDP.
In ascending order, US (2.5% of GDP), Germany (3%), Portugal, Spain, France, Austria, Sweden, Netherlands, UK, Australia, Denmark and Ireland.
Denmark’s exposure was 20% of GDP and Ireland was the outlier with an exposure of 55% of GDP — all the others had an exposure below 10%.
The news on the Irish guarantee was presented as a fait accompli to the ECB, Ecofin and Eurogroup heads on the morning of Sept 30, 2008, coinciding with the issue of the news to the markets.
Once the announcement was made, it would have been very difficult to reverse it.
As regards the Lenihan-Trichet phone conversation a week before the guarantee was issued, I doubt if Trichet gave the go-ahead on a blanket bailout. Unlike his gaffe-prone predecessor, he is always measured when speaking on policy issues.
This story is akin to a unit of a multinational making a major decision without any consultation with headquarters but assuming that everything would be grand because of a conversation a week before with the CEO.!
Decisions made in a panic situation seldom turn out right.
The banks had access to the ECB’s emergency liquidity program which was in place since Aug 2007.
The unlimited deposit guarantee could have been issued and the issue of guaranteeing debt could have been discussed with the ECB in a calmer atmosphere.
If the blanket guarantee was issued to save Anglo, it was an absolutely reckless move to make in the absence of detailed information on the state of the bank.
Remember the context - - yes the crisis had intensified in the previous 2 weeks after the collapse of Lehman - - but it had been 13 months since the onset of the credit crunch; the world’s biggest insurer had to be rescued by the US government and the prospects of an Irish soft landing had evaporated and what did the Department of Finance have?
A Sept 18th PowerPoint presentaion prepared by Anglo and the financial regulator both chimed with the mantra on ‘resilient’ banks.