By Martina Devlin
When the Irish banking and economic collapse happened, we were all stunned at the turn of events. In reality it wasn’t new – it was just new to us.
But why, after everything went belly-up, didn’t anyone stomp down from Mount Sinai on Kildare Street to show errant bankers and developers the error of their ways – many of whom continue to live in denial about the consequences of his reckless, illegal and profoundly devastating behaviour?
Why haven’t we devised a new set of Commandments – number one among them “thou shalt not help to impoverish an entire nation” and number two “thou shalt not transfer all thy assets into thy wife’s name”?
Accountability seems to be missing from the Irish gene pool, that’s why.
Today, we are paying a high price for the lack of protection our government and our regulators afforded us. Most people have lost out financially one way or the other – futures have been squandered. And more pain is roaring down the track in 2011. But the men once hailed as masters of the universe, while no longer masterful, remain virtually untouchable.
People are losing jobs, homes are at risk, businesses are folding, students are graduating and emigrating, young people are making plans to leave – not because they want to go but because they see no prospects in the scorched earth landscape that constitutes modern Ireland. Meanwhile, these men shelter behind the law, their gilded lifestyles protected.
No wonder many of us are disenchanted, fearful – downright furious.
But anger is not a policy, we are often told. Wrong. Anger has been a powerful tool for social change: we have seen it in civil rights movements, anti-war movements, the anti-slavery movement and the feminist movement. Using anger constructively has changed the course of history.
The question is not a matter of whether anger is necessary or appropriate, but how it can be used to achieve results. How can we harness anger?
Some favour mass demonstrations. Personally, I’m not one for storming the Dail. That’s just smoke and mirrors. I’d prefer to lobby for weak laws to be re-drafted. For example, laws that allow profligate bankers to retain generous pensions and bonuses; laws that allow high profile debtors to cherry-pick in which jurisdiction to declare bankruptcy; laws that allow banks to take a bailout from taxpayers, then impose unfair charges on its poorest customers. (I mean you, Bank of Ireland.)
Bankers have been slow to relinquish their perks, even as the taxpayer has rescued them to the tune of some €50bn. Oh, and by the way, I’ve left out an additional €40bn for NAMA. So that’s €90bn in total – otherwise known as three years worth of tax revenue, and don’t forget we have to pay interest on that.
It’s said the only lessons we remember are those which come with hard knocks. Our masters of the universe haven’t taken real knocks. Of course they have lost wealth. But they are not fretting about how to feed and clothe their children, and marital property law means their wives will keep a roof over their husbands’ heads.
We probably can’t expect shackles and show trials.
But I would like to be reassured that many of the senior executives still in situ in banks will never again rise above the level of feeding money into A.T.M.s.
And while I’m on the subject of moral hazard – insulation against the consequences of your decision-making – let’s consider the Government. Its members remain cloistered away from the distress that is palpable out here in the country. Just as US car chiefs got into trouble for flying their private jets to Washington to ask for handouts, our Cabinet ministers failed to understand the appalling signal sent out when they arrived in Farmleigh late last year in a fleet of chauffeured Mercedes to discuss how to take money off the people.
I’ll summarise their fiscal policy, if you like. Maybe things aren’t that bad. Stop staying saying things are bad. It’s unpatriotic. By the way, how much have you got in your bank account? Right. Send it all in to the Exchequer. Lickety-split.
And so to that prince among men, David Drumm, former chief executive of Anglo Irish Bank. On his watch, Anglo operated the Golden Circle, made secret loans to directors and published misleading year-end accounts. Afterwards, he hightailed it to the US, from which bolthole he started spouting about understanding the pain people were feeling back home. I believe the Americans have a saying that fits here: tell it to the marines.
Will Drumm ever be forced to answer for his actions at Anglo Irish Bank? Nobody would bet their house on it. Extradition, as Minister for Finance Brian Lenihan indicated, is contingent on the gardai building a case against him. We’ll have to wait and see – a condition to which we’ve been obliged to grow accustomed.
Drumm is not the only reason Ireland is facing a bill estimated at between €29bn and €34bn for dealing with his bank. But he helped to dig that black hole into which our taxes are disappearing – money which cannot now be used for education and health spending, among other downgraded priorities.
His behaviour serves even to make Sean FitzPatrick look dignified. Fitzpatrick, former chairman of Anglo, is experiencing the full brunt of public opprobrium by remaining in Ireland, where he voluntarily filed for bankruptcy. Though he is far from being a saint, he has not run away. Drumm, by comparison, has the brass neck to seek damages for mental distress against the bank.
Then there is Michael Fingleton and the grubby little piggy bank he created, Irish Nationwide. Fingleton was assiduous in fostering links with politicians. No wonder he was allowed to keep that €1m bonus. As he said himself, he knows where the bodies are buried.
The lack of action against rogue financiers and bankers who behaved inappropriately leaves me troubled for our democracy. An entire generation of politicians, bankers and developers has left it tainted. But not irretrievably, I hope. Hope can be a policy, just as constructive anger can be one. If our democracy is to be retrieved, I believe the young generation of graduates coming through the system now are among those who can do it. Yes, I mean you. You have energy, idealism and fresh perspectives to offer. As discussed earlier, the accountability gene seems to be missing from the older generation’s DNA. Perhaps you can be the generation to restore it. Make accountability a priority.
Currently, our democracy is not served by the lack of connection between pay and performance. By businessmen relocating to other countries, leaving vast liabilities in their wake. By the lack of effort made to reclaim enormous pension pots, bonuses and severance packages from those who did the State too little service, or whose behaviour contributed to the economic collapse.
But we have other problems which will take more than money to fix. I believe Ireland is a broken republic. And not just because the IMF and the EU are running our country now. Ireland is no longer a functioning republic in the true sense: government of the people, by the people, for the people.
How can it be a true republic when all the risk is taken by the community and all the profit is taken by the individual?
How can it be a true republic when the buck stops nowhere?
How can it be a true republic when failure is rewarded?
How can it be a true republic when the Government cynically delayed those four by-elections?
Citizens must accept some responsibility for the substandard republic we allowed to evolve, however. We were wilfully blind. We had corruption blindness, double standards blindness, injustice blindness, dishonesty blindness and tax evasion blindness.
Now, we need to reform our political system. The parish pump element to winning elections is a dangerous reduction. We should consider a list system to bring forward able people who would stand on a national basis rather than represent a constituency.
Not only might this introduce some talent into the Dail, it counteracts the relentless parochialism whereby constituents expect TDs to deliver goodie bags.
Other overdue reforms include eliminating nepotism by introducing a rule to ban relatives of sitting or former TDs – say, up to two generations back – from running in the same constituency. That should extinguish the undemocratic notion of dynastic entitlement.
To those of you considering a career in politics, I say this. Work in the real world first before standing. Some deputies have a blank about life outside politics and this is a disadvantage in any parliament. Whatever happened to building a string of accomplishments, then entering public service?
The principles underpinning Ireland – a liberal and inclusive democracy which aspires, virtually bankrupt or not, to protect its poor, its children, its sick and its elderly – remain sound. The problem is that our society is no longer living up to its job description.
The republic has collapsed, and I don’t only mean economically. Enormous harm has been done to our economy and to our financial system, but a more serious, long lasting disaster has also happened.
I mean the damage to the morale and sense of self-worth of the Irish people. We are now the laughing stock of the western world. Partly, this is due to circumstances beyond our control – but some of it is our own fault, and we also change our behaviour. We must lose our blindness.
Who needed the Anglo Ten scandal to grasp that a golden circle operated in Ireland? Many suspected it. But nobody cared, beyond the odd grumble, until we realised our own pockets would be picked to set the mess to rights.
Who needed a banking collapse to understand that the way land was re-zoned for housing was questionable? Or that the intimate relationship between property developers and politicians was a recipe for profiteering?
Who needed a degree in economics to work out that a 100 per cent mortgage was risky, especially when the buyer loaded up on additional debt to furnish the property and to pay legal fees? But what you do need to know is the idea of equity release in relation to your mortgage. With everything that happens in the world, not everything is as positive as we would like, including our financial situation. But this does not mean that we should try to make it better. There are companies and specialists out there willing to give everyone a helping hand if you are struggling with anything money related. There is nothing wrong in asking for a bit of help at times.
Let’s acknowledge some responsibility.
Were we lied to? Of course. By bankers and by politicians, among others. But a banker’s job is to boost profits for his bank – a politician’s is to serve the electorate. I say this in as apolitical way as I can. We have not been well served.
So where do we stand now? There has been a clean out in the banks, in the regulator’s office, in the Central Bank and, unfortunately, many ordinary people have been cleaned out of their jobs, as well. The developers have gone bust – although you wouldn’t necessarily know it to look at their lifestyles. Yet many of those who landed us in this mess are still in place.
Fianna Fail has held unbroken power for the past 13 years – years in which it persistently pumped the property bubble full of air and behaved as though sharp implements were never discovered.
It could have guided us towards a soft landing. Instead, the party failed to take tough decisions. It kept life sweet for its builder buddies long after property development should have been discouraged. Let’s not forget the Galway Tent has only recently been dismantled.
Both our current Taoiseach and his predecessor were finance ministers – and they guided us straight towards those rocks. Now the Government is peddling the following deal: “You’ll feel the squeeze for a year or two, but a solution will follow. Trust us.”
Frankly, I don’t. This Government promised a cheap banking bailout – instead it delivered the most expensive solution in history. This government said the public finance gap to be bridged was €7.5bn – instead it now admits the bill will be twice that. We are left with a bunch of politicians wandering round in a daze because they can’t borrow any money. Why? Because nobody believes them.
A mountain of work lies ahead for the coming generation: those of you who are able to stay in Ireland and roll up your sleeves. I can’t promise easy times. But I can promise that the work to rebuild and reclaim our country is worthwhile, necessary and important. I’m banking on cometh the hour, cometh the man – and woman.
Martina Devlin is an op-ed columnist with the Irish Independent. She has an MPhil in Anglo-Irish Literature from Trinity College Dublin.
