Monday 16 December 2019

How we led the charge against austerity as the crash hit

Accusations that the Sunday Independent were cheerleaders for austerity don't stack up

The late Sunday Independent Editor Aengus Fanning 'pressed the urgent need for a stimulus package'. Photo David Conachy.
The late Sunday Independent Editor Aengus Fanning 'pressed the urgent need for a stimulus package'. Photo David Conachy.

Daniel McConnell

The date was Sunday , March 9, 2008. In that morning's Sunday Independent, I wrote a piece entitled: "Wake up: There is still time to stop the slump."

In the piece I called for the introduction of a Keynesian-style economic stimulus package in a bid to salvage the flagging Irish economy. I laid out what I felt should be done in a 10-point plan.

"The country is now in a recession and the time has come for Tanaiste Cowen to act. But his negligence and stubborn refusal to act is killing it.

"Look at all the signs, every single one screaming that the economy is in big, big trouble," I wrote pointedly.

This was before the country had properly woken up to the economic disaster engulfing it after half a decade of excess.

But while my humble scribblings went unnoticed, I was not alone. Far greater minds than my own within this stable were also pressing the need for action.

My late colleague, the brilliant Alan Ruddock, had two months previously, on January 13 penned a damning critique of Brian Cowen's last Budget as Finance Minister. He wrote: "December's budget was an opportunity for Brian Cowen, the Minister for Finance, to be imaginative but he chose standard conservatism. Tax cuts, which might have helped stimulate a slowing economy and which might have helped boost confidence, were shelved.

"His conservatism carries high risks, because without stimulus this economy could be heading for very dangerous waters. Since Cowen has turned his face from stimulus, he is left with a classic boom and bust cycle over which he has chosen to have no influence," Ruddock wrote.

As a paper, under the leadership of our economically astute editor Aengus Fanning, for almost three years we led the charge for the Ahern/Cowen-led Governments to consider some form of a Keynesian-style stimulus package in a bid to rescue the flagging economy.

From an examination from the archives, myself, Alan Ruddock, Aengus Fanning, Jody Corcoran, Brendan O'Connor, Jerome Reilly, Willie O'Dea and others all wrote pieces exploring the virtues of stimulus over the policies of austerity.

The press cuttings show, in total, between January 2008 and the end of 2011, more than 160 separate articles in this newspaper, arguing why the country needed stimulation not austerity.

Why, you ask, am I providing this trip down economic memory lane?

Well, this newspaper has been accused of being a cheerleader for austerity.

An accusation which is patently not true and requires refutation in the strongest possible terms.

After Cowen took over as Taoiseach, Brian Lenihan was installed in Finance and the economy's nosedive into oblivion hastened, Aengus Fanning, in an editorial in November 2008, pressed the urgent need for a stimulus package.

"The Irish Government's obsession with balancing its books poses a real threat to this economy.

"Without stimulus, and without radical reform of government spending, Ireland's recession threatens to be deeper and more long-lasting than recessions in other European countries," he wrote.

"The Government must wake up to the economic reality, and recognise the depth of this recession and the damage it will cause. Stimulus is required, urgently," he added.

Throughout 2009, I, as a reporter, and we as a paper continued the calls for a major stimulus package.

In June of that year, I reported on the front page that Brian Lenihan had ruled out such a package on the basis that any benefit of a give-away would "leak out of the country" as people would buy imported goods.

The report detailed how Lenihan and his department were committed to a course of cutting spending and raising taxes, combined with the loss of 150,000 people to emigration, rather then consider any kind of a stimulus package.

"In the US, which is a closed economy, a stimulus package is a good idea because the domestic economy would reap the reward. Ireland is a very open economy and any benefit of a stimulus would leak out into the UK and Europe," one of Lenihan's senior officials told me at the time.

In February 2010, the Sunday Independent's campaign for stimulus came face to face with the Taoiseach Brian Cowen over a Wednesday night pint in the Dail bar, as told by Jody Corcoran the following Sunday.

Making a rare appearance in the visitors' side of the bar to mark the retirement of his outgoing press director, Gene McKenna, Cowen lingered to speak to some of the gathered hacks.

Corcoran was manfully assisted by Liam Collins who put the idea of a stimulus package to the Taoiseach.

"We're borrowing €18bn this year, how's that for a stimulus package," was Cowen's response before he retreated.

As the full scale of the crisis became apparent, there was hardly a week that went by when at least one writer in this paper didn't pose the question as to why such a package couldn't be delivered.

It was at this time that British author Peter Clarke published his excellent biography of John Maynard Keynes and Aengus Fanning not only bought copies for several of the staff, but he too presented copies to several Cabinet ministers in a bid to influence their thinking and force them into some kind of action.

Indeed, he repeatedly tried to impress on Brian Lenihan the virtues of Keynesian economics, but to little avail.

Then in July, Brendan O'Connor took Central Bank Governor Patrick Honohan to task over comments he made dismissing the notion of priming the ailing economy.

"There are people arguing for stimulus. And while Prof Honohan may disregard the barstool economists of the Sunday Independent, he should perhaps be less gung ho about disregarding all those people out in the private sector, trying to create, or hold onto jobs, trying to turn a buck and keep their local high street alive. All of them argue for stimulus too - even if it's just in the form of a bit of credit," O'Connor wrote.

Now, writing for the Sunday Independent, you get used to being called all sorts of things.

Compared to Fox News, accused of being anti-Labour, anti-Fine Gael, anti-Fianna Fail by some, too Fianna Fail by others, I suppose such taunts are par for the course in politics.

But to say this paper has been a cheerleader for austerity, is completely bogus.

Sunday Independent

Today's news headlines, directly to your inbox every morning.

Also in this section