Sunday 26 January 2020

Gene Kerrigan: Clown politics rule and the joke's on us

The travails of FF and FG matter not a damn as the axe hangs over vital public services, writes Gene Kerrigan

WhosE side of the Fine Gael fight are you on -- Lucinda or Enda? Will Michael McDowell climb out of his political coffin and bite our necks all over again? And has Frank Fahey got it right about Nama? These are just some of the questions raised last week that don't matter a damn.

We are currently in the deepest economic doo-dah in the history of the State. We may emerge from it with a shredded public service, with the citizens financially mugged -- while the rich get to hoard their excessive wealth and the politicians protect structural inequality whatever the cost.

All the while, the politicians and their pet economists relentlessly destabilise the political and social foundations in ways they can't imagine.

That's the optimistic scenario. There's also the possibility that within a short time the moneymen who control the markets may decide to bankrupt the State.

Last week, an argument went on about what we should do about all this -- with not a single politician involved. Miles from reality, the usual clown politics continued.

Lucinda and Enda spat feathers at each other and Mickey McDowell coyly simpered and giggled when asked about a political comeback, while Frank Fahey talked yet again through his considerable arse.

The debate about the real world occurred elsewhere -- when the ESRI had a sharpish but considered disagreement on Irish economic policy, with Nobel laureate economist Paul Krugman, of Princeton.

We'll come to the ESRI and Krugperson shortly. First, a question for Lucinda Creighton: don't you have any sense at all of the history of your own party?

Creighton is still in a snit over the failed coup against Enda, Man of Steel. (What on earth was that about, by the way?) It seems some property developer turned

up to play golf at a Fine Gael fundraiser and Creighton saw a chance to take the moral high ground -- how could Fine Gael condemn Fianna Fail and the Galway tent, she asked, when it was "extending the biscuit tin for contributions from high-profile developers who are beholden to NAMA"?

Take that, Mr Man of Steel. "There can be no room in Fine Gael for the cute hoor politics which has defined and tainted Irish public life like an incurable cancer. Fine Gael in government must be much more than simply Fianna Fail Light."

Oh, come on, loosen up, Lucy.

The truth is Fine Gael has been rattling the biscuit tin all my life. Fine Gael only gets into government when Fianna Fail has been in power too long. And there's mere superficial detail in policy differences.

In short, you're Fianna Fail Light. Get over it.

For some reason, Frank Fahey keeps turning up as the Fianna Fail mouthpiece on Nama. And he keeps spouting rehashed lines that make eyebrows soar and chins drop ("Nama bonds are being funded by the European Central Bank").

I always take Frank seriously when he speaks about property. He may be an unimpressive speaker, but Frank is a property expert. According to the Oireachtas register of interests, Frank owns two apartments in Roscommon and three in Galway; one in Limerick and one in Irishtown. He has houses in Galway, in Gort and in Leixlip. And a house in Jumeirah Estates (an exclusive golfing development) in Dubai, and another house in France.

Frank also has shareholdings and partnerships in various properties: an apartment in Galway; properties in Athlone; four apartments and a shop in Limerick; a retail unit, two offices and a warehouse in Gort; a dwelling house in Gort. Then there are five apartments at one address in Brussels, 10 apartments at another address in the same city; and an apartment in Boston. Plus a shareholding in Fahey Higgins (a property company) in Boston. And he has deposits on two properties in Portugal.

Solid man, Frank. Mind you, there is this headline, from the Galway Independent of January 28, 2009: "House prices as low as they will go". It says: "Deputy Fahey urged first-time buyers to make their move." Frank was quoted: "This is a great time for first-time buyers to buy. It is now a buyers' market. There is unbelievable value out there at the moment."

Perhaps anyone who followed Frank's advice would let me know how that worked out?

The security of the State is in Frank's hands, not to mention the steady hands of such stalwarts as Paul Gogarty and Brian Cowen, renowned blower of bubbles. The agreed line is to drastically deflate the economy -- thus depressing consumer demand and ramping up unemployment rates.

Obviously, this makes the recession worse. But Brian and Frank and Mr Gogarty believe austerity will balance the books, depress wages and make the economy more competitive, and thereby generate confidence among the moneymen, who will open their wallets and soon we'll all be buying five-grand handbags again.

The media cheerleaders praise the "tough decisions" and any opposition to the party line is dismissed as unserious -- because dissenters "just don't understand how the real world works". It's all about boosting the moneymen's confidence.

On June 29, Paul Krugman pointed out that "savage austerity was supposed to bring rewards", and some even claim that "Ireland's resolve has impressed and reassured the financial markets. But the reality is that nothing of the sort has taken place: virtuous, suffering Ireland is gaining nothing".

On July 1, Krugman pointed out that the currently fashionable austerity measures mirror the failed policies of President Hoover, who -- despite the best of intentions -- made the Great Depression worse in the early 1930s.

Five days later, Krugman pointed to the theory that investors will become confident if citizens practice austerity, that moneymen will charge less when the Government borrows. He called this a belief in the "confidence fairy".

And last Wednesday, Krugman questioned the ESRI's backing of Bubbles Cowen's austerity policies: "Some of us would argue that... austerity may be self-defeating. But such concerns don't even get mentioned."

Now, Krugman is a centrist economist. I haven't seen anything from him that suggests the radical policies that would match the scale of the crisis -- but should I listen to him or to Frank Fahey?

Cheerleading economists here immediately refocused the disagreement as one of "stimulus versus austerity", and hauled out the standard argument against stimulus ("small open economy"). But Krugman's point is that -- despite the evidence -- the austerity line continues blindly.

Sure enough, muttering began that Krugman has become "political". Economists who cheerlead austerity are, of course, untainted by a political perspective.

Cowen and Lenihan imposed austerity -- it's not balancing the books or reducing the cost of borrowing, so what do we need? More austerity, say the believers in the confidence fairies. So, government ministers enjoyed lunch at Farmleigh last week as they sharpened the axes they intend taking to public services.

Meanwhile, the head of Nama gets a 70 per cent salary increase.

And bankers warn that directors' salaries must go up. And there's debate about how many hundreds of thousands in salary should be paid to failed developer Bernard McNamara if he helps Nama sort out his crashed business.

And, back at clown politics, do you think we might persuade Mickey McDowell to give the oul' politics lark another shot? Oh, go on, Mickser, have a go -- we need the laugh.

Sunday Independent

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