Good to see someone finally calling it the way it is, THE COLLAPSE of the artificially inflated property bubble over the past 18 months has brought the country to its knees and destroyed the Irish banking system as we know it but, remarkably, the political system looks exactly as it did before the economic earthquake struck. A Fianna Fáil-led Government is still securely in power and shaping up for yet another year in charge, writes STEPHEN COLLINS There are signs, though, that the shifting tectonic plates of the economy will have a dramatic impact on the political system, sooner or later. For a start, a change of government looks inevitable after the next election but the big question is whether that will result in fundamental long-term transformation or merely mark another short interruption of Fianna Fáil dominance. The electorate does seem to be on the verge of a decisive shift. The European and local elections last June turned traditional party politics on its head, with Fianna Fáil slumping to its lowest share of the national vote since the 1920s and Fine Gael becoming the biggest party for the first time. Yet despite that extraordinary result the Government parties regrouped and continued through the autumn as if nothing had happened. The Taoiseach and his ministers are very pleased with themselves after jumping the well-flagged list of hurdles they set during the summer: the Lisbon referendum; a new programme for government; the Nama Bill; and the Budget. Conventional political wisdom is that the Fianna Fáil-Green Party coalition is now set fair for another year or two but it would be very foolish to take bets on it. Events have a way of destabilising governments, just when they look at their most secure, and there are a host of potential pitfalls out there. For instance the recent Prime Time programme on the links between the bankers, developers and Fianna Fáil disclosed what was probably just the tip of the iceberg. But it was shocking for all that. The responsibility shared by some of the most senior Government figures for what went wrong could come back to haunt them at any time. Going by the results of last June’s elections and a succession of opinion polls, the electorate is determined to get even with Fianna Fáil for what it, and its friends, did to the country. While there seems to be a broad acceptance that pain has to be endured in the interests of national survival, it seems people will not forget who caused it in the first place. That mood is almost certain to lead to a change of government at the next election, whenever it happens. Fine Gael and Labour are in a strong position to sweep into power with a real mandate. The main reason for that will simply be disillusionment with Fianna Fáil but the two Opposition parties will need to work harder to devise a realistic programme for government. TDs from both parties resent some of the criticism that they are getting for not spelling out exactly what they would do if they were in government. They point out, with some justice, that Fianna Fáil has the primary responsibility for creating the mess and they don’t see why they should have to spell out in detail the kind of unpopular choices that now have to be confronted. However, in their own long-term interests Fine Gael and Labour need to tell the electorate the hard truths about what things will be like after a change of government. If they are elected on a wave of public anger at Fianna Fáil, and denial about the real state of the country, disillusionment with them will set in very quickly. Not since 1927 has a non-Fianna Fáil government been elected for two terms in a row. Enda Kenny and Eamon Gilmore have the opportunity to break out of that pattern if they come to power with realistic expectations about what they can do in the current harsh economic climate and if that is linked to a programme of underlying reform of the political system itself. For instance, reform of the tax system is an overriding imperative but even after its years of dissolute behaviour, Fianna Fáil is still shying away from facing up to the need to introduce a comprehensive property tax as well as taking a bigger slice of revenue through income tax. If the Opposition parties are open about what they intend to do, they may have a mandate from the voters to implement real change and there won’t be a backlash when they do it. The next election is likely to see a much greater focus on policy issues than any other in recent times. For one thing, the economic crisis should focus the minds of the voters on real issues, with facts rather than emotion taking centre stage. For another, the personality-dominated era of Bertie Ahern is over and voters may be able to focus their minds on the really important aspects of the choice they face. An often-voiced criticism of Enda Kenny is that he is not a big personality like Ahern but that could actually be turned to his and Fine Gael’s advantage. After all, it is becoming clearer by the day that Ahern was probably the worst leader the country ever had and people in all walks of life are now suffering because of his incompetent management of the economy. What the country desperately needs is a leader who can run an efficient and honest government, rather than one whose raison d’être is a craving for public approval. Kenny has the credentials to present himself as a classic chairman rather than chief and, with Eamon Gilmore, who has proved himself a strong Labour leader, could offer the country hope. If the Opposition parties are not seen to be facing up to the issues in an election that is about policies rather than personalities Fianna Fáil could actually stage a bit of a comeback. Whatever about causing the crisis Fianna Fáil has finally got to grip with the economy, mainly through the efforts of Minister for Finance Brian Lenihan. He has the advantage of not being tainted by association with past sins but he has also displayed courage and intelligence. For all that, the best Fianna Fáil can hope for at the next election is to minimise its losses. One issue the Opposition parties could do well to focus on is the need to transform the political system itself. The Greens got Fianna Fáil to agree to look at the issue in the new programme for government but no one in politics realistically expects the party of near permanent power to agree to change an electoral system which has served it so well. Yet the imperative for change is overwhelming. Our system of multi-seat proportional representation has encouraged a system of clientelist politics that, at the very least, contributed to our current woes. In order to survive TDs are forced into mindless competition in terms of constituency work and don’t have time for the bigger picture. It is the pressure from local and often vested interests that contributed to so many bad planning decisions, fostered a culture in which corruption thrived and fuelled a property bubble that has brought ruin and hardship to so many citizens. During the Ahern years the government actually entrenched the system by formally giving TDs allowances for constituency offices, secretarial help and a range of other benefits to help them in the unending quest for votes. A move to single-seat constituencies linked to a list system would improve things. It would required a constitutional referendum but a move to cut the number of TDs to 120 and change the Seanad might encourage voters to back reform. There would certainly be considerable voter resistance to change but the scale of our problems should convince people that while the current system provides a great deal of entertainment on election night, it is actually part of the problem. A radical change in the way the Dáil does its business by involving all TDs in decision-making is also vital. A cull of the committees, many of which were designed with perks for government backbenchers in mind, would be a real service. A handful of well-resourced and powerful committees where TDs could have a genuine input into legislation would improve political life. A genuine attempt to devise a more open and accountable system would be of enormous benefit to the politicians themselves as well as to the country and might help put paid to the nod and wink culture that has created so many of our current problems. Of course there is no guarantee that changing the electoral system will automatically transform the quality of political life. Ultimately the health of our political system, and the values of our public representatives, comes back to the standards set by the electorate. If voters want honest and hard-working politicians they can elect them but, if they persist in electing a substantial number of charlatans and chancers, they must accept the consequences.
Good article, Bertie Ahern never hung around long enough for the public backlash and both he and McCreevy were probably the 2 senior politicians most responsible for this mess (Cowen to a lesser extent). What grates most is the fact that the bankers, developers, regulators and politicians have got away virtually tax free. They collected their bonuses and have got monstrous pension funds built up all at the expense of the taxpayer. Its an absolute scandal and until these people are made pay financially and serve prison sentences there will be no real sense of justice.
You know what though, he will still be remembered as a man of the people. Forget the Monk and the General, Bertie and Charlie Haughey are the two biggest gangsters this country has seen.
i heared an add on the radio there before xmas for a book about how it all went so financially wrong in this country.it was written by some big shot economist who won loads of awards and they were reading quotes from some people who had read it.one of the quotes was from the bould charlie.i tell ye,i nearly smashed the fcukin radio when i heared him saying what a great buke it was...
Piece from New Stateman might be of interest....bits in bold struch a chord with me Failed by Fianna Rob Brown Published 11 January 2010 8 commentsPrint versionEmail a friendListenRSSThe Irish government rejected fiscal stimulus and slashed public spending instead. The result is economic meltdown. Is this a foretaste of life in Britain under the Tories? Celtic Tiger to Celtic Tories would seem an apt way of summing up the story of Ireland in recent times. From poster child of free-market globalisation everywhere from Hungary to Honduras, the UK's nearest neighbour is now enforcing the most savage cuts in public-sector pay, child benefits and social welfare payments of any EU government. Such is the level of misery being endured by the increasingly bewildered citizens of this little republic that even Brian Lenihan, the man principally responsible for inflicting it, has publicly acknowledged that fellow Europeans are "amazed at our capacity to take pain". The finance minister added, slightly boastfully: "In France there would be riots if you tried to do this." Lenihan's last budget, delivered shortly before Christmas, was so draconian that the Daily Telegraph took to hailing him as a role model for the British Chancellor. Inevitably, this led to him being branded "Iron Brian" back home, though he will doubtless be spared Margaret Thatcher-style demonisation as he has since been diagnosed with pancreatic cancer. Instead, the nickname will probably now be pinned on the premier, Brian Cowen, who has responded to the current crisis pretty much as David Cameron and George Osborne advocate. Alone among the leaders of advanced industrial nations, Ireland's two Iron Brians rejected the Keynesian case for a fiscal stimulus to keep the economy moving and set about inflicting a scale of pain from which even the new Tories might flinch momentarily. Since the onset of the credit crunch in mid-2008, Dublin has delivered three slash-and-burn budgets estimated to have sucked about 5 per cent out of the nation's GDP. Exacerbating rather than alleviating the rapid meltdown in its private sector, such retrenchment could contribute to an astonishing 15 per cent shrinkage in the Irish economy overall - the sharpest contraction experienced by any advanced industrial nation in peacetime. The British economist David Blanchflower warned that Ireland could be plunged into a 1930s-style depression if the public purse is cut: "Balancing the budget is not what you do in a recession. My advice is to wait until you're out." His warning was widely reported in the Irish press but totally ignored by government. The unemployment rate now stands at 12.5 per cent and the number drawing the dole (including part-timers) has risen to well over 400,000, in a population of 4.5 million. It could easily hit the half-million mark before this slump is over and would be much higher if Ireland's more mobile citizens, along with many recent immigrants, weren't heading out of the country in search of work. Mass emigration is once again providing a safety valve for social unrest, as it has done throughout Irish history. Spooked Lenihan sought to offer some hope in his last budget by declaring that "the worst is over", although there would appear to be a stronger case for suggesting that the austerity has only just begun. The cuts announced in December aim to reduce state spending by €4bn this year, but the overall plan is to slash it by €15bn within four years. As total expenditure by the Dublin exchequer was just under €60bn last year, this means that the Irish state is set to shrink by a full quarter in less than half a decade. At least two generations look destined to pay a painful price for the follies of the golden circles whose scams, swindles and con jobs have lumbered Ireland with zombie banks that make RBS and HBOS look relatively vibrant. Anglo Irish alone may swallow over €30bn of public cash, equivalent to the total revenues collected by the Irish exchequer in the whole of last year. Morgan Kelly, a professor of economics at University College Dublin, forecasts that "mass mortgage defaults caused by unemployment and falling house prices are the next act of the Irish economic tragedy. As well as bankrupting our worthless banks all over again," he says, "the human cost of tens of thousands of families losing their homes will be enormous but, because the government has already exhausted the state's resources taking care of developers with Nama [the National Asset Management Agency], there is very little that can be done to help these people." Meanwhile, the social partnership accords that ensured industrial harmony throughout the past two decades have in effect been ripped up and the public-sector unions are threatening to bring the entire country to a standstill before the winter is out. Even the republic's police force, the Garda SÃochána, say they are prepared to go on strike, which could mean Ireland faces the sort of anarchy that Boston experienced in 1919 when its (largely Irish) rank-and-file officers protested against a ban on union membership. Yet, Dublin's fragile coalition government seems far more spooked by the danger of international investors downgrading their country's credit rating (which would make the cost of borrowing substantially higher) and the spectre of the IMF seizing the financial reins. Dublin is determined to distinguish Ireland from Greece, whose continued profligacy threatens to destabilise the entire eurozone. The 20 per cent cutback in state expenditure that the Irish want to implement within the next four years is intended to comply with an important requirement for membership of the single currency that member states keep their expenditure deficits down to a maximum of 3 per cent of GDP. The European Central Bank (ECB) agreed to bend this rule when the extent of the global crash became clear, but it has set firm deadlines, between 2012 and 2015, for each state to recomply (Ireland's is 2014). Members of the cabinet have stated repeatedly in recent months that everything they have done to address the country's economic crisis is in accordance with ECB advice. No one in Dublin doubts Ireland would have been in the same mess as Iceland had it not signed up to the single currency, the main reason the Lisbon Treaty was passed by such a huge margin at the second time of asking. Their continued euro enthusiasm is just one reason why Ireland's current rulers would bristle at the Celtic Tories gibe. When the leader of the Labour Party, Eamon Gilmore, coined that sobriquet, he was perhaps unaware that the term "Tory" originated in Ireland. It derives from the old Gaelic word tóraidhe, meaning outlaw or robber, and was initially a term of abuse for the isolated bands of guerrillas who resisted Cromwell's brutal campaign in the mid-17th century. Since these rebels were allied to royalists, the term became embraced by monarchists on the British mainland, and, in time, by the modern Conservative Party. As Ireland's self-styled republican party, Fianna Fáil is obviously anything but monarchist. Nor has it become monetarist in an ideological sense; it is too simplistic to say the party is engaged in a zealous crusade to squeeze the country's money supply, re-engineer society according to a social Darwinist blueprint and neuter the trade unions. Blythe spirit Yet it is telling that Lenihan was denied the customary standing ovation in the Dáil chamber (parliamentary meeting place) at the conclusion of his last budget speech in the Dáil. Fianna Fáil backbenchers clapped politely and then returned nervously to their constituencies, where they have normally positioned themselves as defenders of social welfare and worked hard to preserve a working-class base. Lenihan would have taken no delight in becoming the first Dublin finance minister to cut social welfare payments since the foundation of the Irish Free State in 1922. He certainly didn't enjoy being taunted by RóisÃn Shortall, the Labour Party spokeswoman on social and family affairs, who declared poetically in the Dáil: ''The social conscience of the Fianna Fáil party is dead and gone. It's with Ernest Blythe in the grave." (Blythe was the last Irish politician to engage in such brutalities in the 1920s.) The Fianna Fáil strategists and stalwarts are smart enough to know that what is one of the most successful electoral forces in western Europe would be finished if it ever invoked the Thatcherite line that "there is no such thing as society". Even when forecasting to the Dublin Chamber of Commerce that living standards would have to fall by over 10 per cent, Cowen was careful to add that "we must stick together as a community". The political system of independent Ireland has long been tribal, local and clientelist; it is closer to Tammany Hall (the 19th-century Democratic Party machine run by Irish Americans) than Tories versus Labour. What Fianna Fáil can be accused of is crass populism. During the country's prolonged economic boom, the dominant force in Irish politics wanted to remain all things to all Irishmen (and women). The fat cats certainly got the cream during the Tiger years, but crony capitalism (a capitalist economy that depends on close relationships between government and business) was always combined with a vague republican commitment to equality. In his time as Taoi*seach, Bertie Ahern defended the way his party courted property developers, builders and bankers at some of the nation's social and sporting events. At the peak of the Tiger boom, he said: "If there are not the guys at the Galway races in the tent who are creating wealth, then I can't redistribute it." The reality was that this "ordinary fella" was presiding over more of a fantasy island than even Brown's Britain. When serious concerns started to be raised about the republic's unsustainable property boom - which accounted for almost a fifth of the Irish exchequer's income before the crash - Ahern responded that "the boom times are getting even boomier". He took no serious steps to lower the state's reckless dependence on property and construction. The one-time island of saints and scholars had become a land of spivs and speculators and a manufacturing outpost for American multinationals. Ireland's economic miracle was always somewhat hallucinatory, because these US firms, heavily concentrated in chemicals and pharmaceuticals as well as computer software, used it as an Atlantic tax haven and route to the EU marketplace. Ireland Inc was always far richer than the national workforce, three-quarters of whom earned less than €40,000 per annum, even in the good times. During this period, popularity - and peace with the unions - was bought by slashing income tax and shovelling much of the proceeds of the nation's property boom into a bloated public sector as well as vastly increased social-welfare benefits. When Ahern took office in 1997, the average single person on €40,000 a year paid 40.6 per cent of their annual earnings in tax. By 2004, this had been cut to just 19.7 per cent. His government cultivated rather than cured a widespread phobia towards taxation of any sort. Even when the price of a three-bed semi in Dublin rose to €1m, there was no serious move to introduce a council tax (or any separate source of local government finance). Compared to many others, the Irish have a remarkably low percentage of their salaries deducted for income tax and social security. Indeed, for quite a prolonged period now, half of the entire national workforce has got away with paying no income tax. Even today, a single person earning €35,000 a year in Ireland is paying 18.7 per cent of their gross income on tax and social security, compared to 39 per cent in Germany, 29 per cent in the US or 23.5 per cent in the UK. Welfare state Yet the Irish have been able to fall back on considerably higher welfare benefits than the British. Dole claimants in Dublin and Donegal aren't exactly prosperous, but they are much more comfortably above the breadline than their counterparts in Derry or Doncaster. Until recently, the basic jobseeker's allowance in the republic stood at €200, compared to £60 in the UK. Such is the gap between Irish and British benefits that the Gardaà have had to mount checkpoints to try to stop unemployed people from Northern Ireland sneaking into the south to register a claim. Lenihan's budget should certainly address the border problem in the case of the youngest claimants, who had their benefits halved in the December budget. But most welfare recipients probably won't be any worse off, as the slight fall in their benefits will be offset by the steep fall in prices that Ireland is now experiencing. If there is a governing philosophy at work in Dublin these days, it seems to be this: just as the spoils of the Tiger times were spread around, so everyone must now take a share of the pain. The government attempted to put a progressive coating on the public-sector pay cuts by declaring that those earning less than €30,000 would have their pay cut by 5 per cent, compared to a 15 per cent clawback in the case of those with salaries above €200,000. The big problem for the ruling party is that the catch-all approach that kept it in power throughout the boom has converted into unprecedented unpopularity since the bust. Fianna Fáil has been shaken to its foundations as its populism has become unpopulism. Stuck at below 25 per cent in the polls for more than a year now, its leader has become the most loathed Taoiseach in history. Meanwhile, concern mounts that Dublin's shock therapy risks a deflationary shock that could not just collapse public-service provision, but propel Ireland into a full-blown, Japanese-style depression.
Pity the smartarsed economist only told us what was wrong two years after america crashed and draggeed the rest of the world down. Would've loved to see the htreads in ehre if they told banks what to do and stop lending to builders who were creating so many jobs for everyone in the country. Hilarious revisionism and hindsight.
Pity the jobs werent long term sustainable ones...we could never go on buying over priced houses for ever....
It easy to blame Bertie,FF,bankers,builders etc but imo we are all to blame. The ordinary man in the street was more than happy to sell his 3 bed semi for 10 times what he bought for 10 years previous. He wasnt thinking of the economy or the next generation, he was thinking of cashing in just like his neighbours. I bought my apartment 3 1/2 years ago. I was told by my estate agent that prices were rising by 75k on the Monday, so we signed on the Friday. Our intention was to stay for a year, make 100k and buy a house. Now its worth about 40% or 50% less than what we paid for it. We got badly burnt but its no one's fault but our own. The whole country got greedy thats not Berties's fault.
Did you ever ask how we got into that position? There has been corruption (political and otherwise) in planning in Dublin and other areas in the country since the 1960's the focus has not been on building sustainable communities but those in Govt. & Councils making a quick buck..
Thousands of people up and down the country are caught in the exact same position. Fair play for being so accepting of the situation but did you ever question the monetary gain made by those forcing the sale onto you? The government=VAT & Stamp duty on preoperty sales Estate Agents=Percentage of the selling cost Banks=Bonuses for bankers gaining the business and additional profits for bank (on paper) Media=Huge advertising revenues from property supplements So they were all out to feather their own nest whilst ordinary Joe Public was taken for a ride. I almost fell victim myself in late 2007 but luckily held on when prices started to dip. I have to admit I was beginning to feel under pressure to buy at that stage but luckily held off and still haven't bought. I have to admit I didn't see things turning out just as badly as they did so I got lucky to an extent.
I did have doubts but obviously was far to casual about the whole situation. The prices did you up on the Monday by the way, whether any sold is another matter.
That's why there are supposed to be regulators, to control the greed of the bankers etc and ultimately stop the the public getting caught up in an elaborate pyramid scam/illusion. Bertie didn't care what happened down the line because he knew he would be long gone. What is the point of government if they are not going to control the the country and it's citizens? Capitalism was allowed loose because there was to many people making money, even though most of it was only virtual. Always remember that regulators were never there to do the job they were put in place for. Regulators were the failed bankers who couldn't make it on to Wall St etc.
I never said they were blameless. Of course they are mainly to blame but my gripe is with everyone constantly blaming FF,Bankers,Construction etc. Its self responsibility time, its not as if they didn't offer us a chance at the polls (twice) to call a halt.
Your right about voting them in for 3 consecutive terms. We are just sheep Put it another way. If there was 20 packets of sweets put in front of your child. Would you let him eat them all. He is happy eating them and thats all he thinks of. You will stop him from eating them all because you know the consequences for both of you if he does. He gets sick and you have to clean up the mess so you take the sweets away from him before this happens.