Tuesday, April 27, 2010

Thursday, April 1, 2010


Ireland’s fascination with property and politics is matched only by its massive confusion of attitudes towards it. Our desire to own property must be linked inextricably with our history; one of plantations, occupation, evictions, penal servitude, migration and emigration.

The experiences of our forefathers must somehow remain in our genetic DNA that the Irish psyche over the past two generations remains so focused on owning property regardless of the financial and emotional pain that is inflicted on mortgage sufferers and society. Many people, in their quest for owning property and providing a home, thought they knew what they wanted but when they got it realised something else was missing; a community, proper infrastructure, schools, access to amenities, buses, shops and playgrounds. The long-term implications of the housing bubble, including living in the far-reaching commuter belt of cities with a lack of community facilities, building on flood plains and the lack of proper planning and development that have accompanied it, will be examined for generations to come in the wake of the Celtic tiger.

The roots of the recent property bubble lie in the collaboration by many professions, from bankers, developers, politicians, economists, planning consultants, farmers and landowners to journalists, media professionals and ordinary members of the public. They created the conditions for the greatest financial fraud and community disservice in the history of this country and the Frankenstein financial situation we now face. The price for Cromwell’s settlement and forfeiture of 2,000,000 acres of Irish land was the dismantling of the irish economy and the relocation of thousands to west of the Shannon; the price for the Celtic Tiger we have yet to fully understand but like Cromwell it involved relocating and condemning tens of thousands of people into “development lands” with little infrastructure or prospects of sustainable employment and ultimately the imploding of the Irish economy.

We have witnessed over the past ten years catastrophic mismanagement of our economy. We have sold our souls to the devil and in the process brought this country to economic ruin. The truth is we are all guilty, some obviously more so than others. We have all been involved in the economic meltdown through our political affiliations, trade unions, business or commercial dealings; society universally bought into a giant pyramid scheme that has resulted ultimately in the financial collapse of our nation’s finances.

So is it right to blame our politicians? If so, who would have thought that the individuals right to vote would have such enormous power over our collective futures?

What we have witnessed over the recent years is a catastrophic failure of the political system in this country to face up to their collective responsibilities. Our political system relies on one basic imperative - the need to protect the political party and get re-elected. The Irish voter was willingly coerced into believing in a future that did not exist. Eventually the means of securing re-election by buying favour with the voters for short-term gain has finally come home to roost.

The wider legacies around which the current government and by and large the opposition parties have survived and sought power have been based on continued economic growth regardless of the long-term socio-economic or environmental impacts of their policies. This is no more evident than in the financial mismanagement of this nation over the past ten years. Fianna Fail now alienated and largely despised by the public were the most popular political party in the history of the state. They have remained the party of government for most of the past twenty-one years, eighteen long years to be precise.

FF’s durability in office in recent years is due in large part to the willingness of smaller political parties to share power in coalition thereby ensuring the continued domination of FF in Irish politics. In the end the smaller parties have always paid the price. There was always a substantial proportion of the population who were opposed to the policies of FF and they did not forget the betrayal of the smaller parties, waiting in the long grass to cast their vote of disapproval.

This occurred with the Labour Party, the Progressive Democrats and now the Green Party are exposed to the same recriminations. This is indeed ironic for the Green Party, for above all others they were the one political party that exposed the weaknesses of these same policies over their entire time in opposition. In recent coalition governments, the smaller party always saw themselves as the party of reform and watchdog over the excesses of FF. Their excesses were, as we now know only too well, never curbed. Their policies perpetuated a political and planning system bereft of the principles of sustainable development, that resulted in the monopolistic excesses that we now witness in NAMA and the billions of euros of bad debts held by a handful of powerful people.

Now the Minister for Finance, Brian Lenihan has informed the nation that the state are buying €81 billion of toxic assets from the nations banks. So far the total cost of bailing out Anglo Irish Bank is €22.3 billion, what was a private bank for the wealthy and powerful has now become a financial black hole for the Irish economy. How did this happen?

In 2008, Cohen and Lenihan, backed by a discredited economics profession, assorted lobbyists, the construction industry, the discredited financial regulator and chief executives of Irish Banks, terrified the Government into providing a state guarantee for all deposits in Irish banks, singling out Anglo Irish Bank in particular, handing over billions of euros to provide short-term liquidity and nationalizing a private bank Anglo Irish Bank “in the national interest”. The Irish public has not yet grasped the nature and extent of this crime.

Brian Lehihan stated in the Dail this week that the former financial regulator had failed abysmally in their responsibilities. In December last year the Governor of the Irish Central Bank, Patrick Honohan, said that “ignorance and inattention” were at the heart of regulatory failure in Ireland. The question begs as to ignorance and inattention by whom? By our government and its appointees to position of power in this country including the previous finance Minster and financial regulator?

The Financial Regulator, Mr. Leary, the man who oversaw the culture of “ignorance and inattention” took early retirement and received a lump sum of €390,000 and an annual pension of €130,000 as part of his retirement package. Another taxpayer bailout and job well done with no accountability and no penalty for professional misconduct. Meanwhile Fianna Fail, the party of government that oversaw this mismanagement, ineptitude and incompetence of government at best and criminal behavior at worst, remain in power.

The consequences of their actions is that the innocent will pay for the sins of the guilty as the financial system crashes in on itself. We are now a nation of financial slaves. Those who conjured up this financial Frankenstein seek to be rescued from themselves by us the taxpayer who as ordinary people will be left to suffer the most from their mismanagement.

The root of this financial breakdown lies in the machinery of powerful lobbyists, bankers and developers, and its use of our political system as a powerful tool for and self-enrichment. When one says that money is power, one is simultaneously saying that money is political. The existence of the FF tent at the Galway races over the boom years of the Celtic Tiger says it all. The secret deals and private meetings for cash with leading politicians and political parties, from former Taoiseach Bertie Ahern to corporate donations to political parties set in motion a political system and parliament for sale to the highest bidder.

What is the result of all of this? We are now entering the period of the second Great Depression. Our banks are insolvent and some of our leading companies linked to these same financial institutions are also insolvent. The high court decision to appoint provisional administrators to Quinn Insurance was based on the financial regulator’s very serious concern that Quinn Insurance was unable to meet its liabilities to policyholders. This may in some way explain the delay policy holders have faced in receiving insurance compensation for the recent flooding in November last. It may also explain why Lehihan nationalized Anglo Irish Bank of which Quinn was a major shareholder.

Before this Government falls as indeed it surely will, there are two critical items that must be addressed, both of which are part of the revised Program for Government, the first is the new Planning Bill which will circumvent the role of local councilors rezoning lands for developers and the second is outlawing corporate donations to political parties. This is the legacy that the Green Party could leave for the betterment of Irish politics and society. However, neither time nor public opinion is on their side. They better work fast, the voters are waiting in the long grass and they won’t forget, they never will.

In his biography of Oliver Cromwell, John Morley assesses Cromwell’s place in Irish history in these words: “...to everyone it will at least be intelligible how his name has come to be hated in the tenacious heart of Ireland. What is called his settlement aggravated Irish misery to a degree that cannot be measured, and before the end of a single generation events at Limerick and the Boyne showed how hollow and ineffectual, as well as how mischievous, the Cromwellian settlement had been.”

What will future historians write about Fianna Fail, the celtic tiger years and the Frankenstein called NAMA they created.