Thursday 29 September 2016

Taxpayer mugs force-fed a cover story

Sneering Michael Noonan says we took one for the team, but we weren't even asked, says Gene Kerrigan

Published 15/09/2013 | 05:00

Here's how it works. First, the establishment denies the truth and puts out a cover story. Then they admit that the cover story might not be entirely accurate. Later, they adjust the cover story to match the revealed facts. Finally, they sneer at those who were so naive as to believe the cover story.

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Last week, Michael Noonan got to do some sneering. He loves the oul' sneering, Michael does. And today, in the new Anglo Tapes stories in these pages, we see more of how the banking scandal unfolded behind the scenes, as the Anglo rank and file were being fed what one taped banker called "the Disneyland version".

Truth for the insiders, and cover stories for the mugs, that's the way it works.

Merrill Lynch was the outfit hired by the government to advise on sorting out the banking crisis. The politicians were clueless, depending on bankers to explain what was happening. Yet, at that time, the Merrill chap was telling the Anglo chap: "Nobody knows what is going on anymore."

Merrill was hired by the government in 2008, to give advice as the panic set in. It wrote a report saying, "all of the Irish banks are profitable and well capitalised." Six months earlier, a Merrill analyst named Philip Ingram had written a report stating the truth about Irish banking, as insiders knew it. Irish bankers screamed blue murder at Merrill. So, Merrill laundered the report, apologised, and eventually Ingram found work elsewhere.

The various Anglo Tapes certainly show it was about more than greedy, reckless bankers. There was a submissive government, a financial system within which the Lords Above Us All "do whatever they damn well please" – and the mugs are fed a cover story, their only job being to pick up the tab for all this.

As the Merrill chap explained: "It has now got to the point where everybody is going to pay for it."

There has been no reform of all this. The bankers still make the running. A ferocious Joan Burton threatens damnation for anyone who claims the dole while doing the odd nixer – but this bizarre world of insiders allowed to gamble with our lives gets to just keep on keeping on.

In recent days, on the international business stage, Mr Noonan has been chatting up our betters, giving an audience last week to Bloomberg BusinessWeek. BusinessWeek is one of those forums to which politicians and business people go when they want to impress one another. Their words aren't aimed at us, but at other insiders.

Michael gave a business journalist the inside story on Michael's own brilliance. "The most essential thing in Europe is, first of all, you need to know what you want," he said. He explained how "his colleagues, other finance ministers, travel to the continent's endless circuit of meetings, but some don't know what they're asking for."

Oh, those silly finance ministers. Michael, on the other hand, is the James Bond of international finance: "I have a very clear view of what I want all the time," he said. The reporter, Brendan Greeley, catches precisely an aspect of our Michael that we've all seen: "He has a way of interrupting his stories with his own laughter."

Michael gave us some insight into truth and cover stories. Remember how we were told, from late 2010 onwards, to be grateful we were being "bailed out"? Some of us said we weren't being bailed out, that French and German bankers and bondholders were being bailed out, and that the money was being temporarily run through Ireland, so we got to take it on as debt.

The pet economists and other experts explained that this was nonsense – it's the gap between exchequer income and spending that matters. However, now that the bondholders have been paid, and we've taken on their debts, the cover story can be adjusted.

"We took one for the team!" Michael told BusinessWeek. The exclamation mark is BusinessWeek's, inserted to note Michael's visible excitement. "And it's known in Europe", he added proudly. "The main bondholders were the French and German banks. Everyone knows who was rescued, you know?"

Eh, apart from the mugs who bought the cover story.

"So, like, lads, we took one for the team", Michael is quoted in BusinessWeek. Did ye hear that, lads, he's asking the global business and political elite. We did you a big favour. And now we're on our knees again, asking ye to give us an oul' break – ah, go on, sir, help us out with our debt burden, wouldya, sir, wouldya?

I don't remember being asked to "take one for the team". Were you asked? Is a debt that was accrued under false pretences a true debt? And what is this team, who are the main players, what game are they playing?

Well, the new Anglo Tapes give us an angle on that. As the financial system melted down, Anglo executives got the word that "significant money" was coming out of AIB and Bank of Ireland, "and going into German bunds". This was from "the high private client side". Indeed, the amounts of money were "quite shocking". Maybe half a billion over a couple of days.

"Super high net worth" individuals, who had benefited from the Celtic Tiger nonsense, were now shifting their money to Germany. These included the merely rich and the truly richest among us. On to the German lifeboat, let the mugs take the hit.

One incident comes to mind. People were uneasy about the banks. A postmaster rang RTE's Liveline and said that ordinary people were taking money out of the banks and putting it into the post office. Listeners joined in with anecdotal evidence. Were the banks in trouble? A reasonable question.

These were the people with life savings, earned through hard work – not the windfall proceeds of Celtic Tiger speculation. Among the elite, we learnt later, there was turmoil – bloody taxi drivers and hairdressers had the cheek to discuss the financial crisis on radio – they were talking down the economy, it had to be stopped.

Brian Lenihan rang RTE, senior management put the gag on Liveline and privately badmouthed the programme. And if there's a similar panic in the future – and the way the banks have been left in charge of our lives, there will be – the same attitude will prevail.

Truth for the insiders, and cover stories for the mugs, that's the way it works.

Sunday Independent

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