Dan White: Cowen's the star, but Inquiry is asking all the wrong questions
Former Taoiseach and Finance Minister Brian Cowen's performance before the Oireachtas Inquiry investigating the events that led to the 2008 bank deposit guarantee and the 2010 Troika bailout was an assured one with only the merest hint of contrition.
Gone was the cowed figure we saw during his final months in office in late 2010 and early 2011. This was a confident, cogent, combative performance reminiscent of Biffo in his prime.
Anyone expecting Mr Cowen to meekly shoulder the blame for the events of 2008-10 was disappointed. Rather than allow himself to be cast in the role of designated scapegoat, Mr Cowen came out fighting. The bank deposit guarantee was, he argued, the "least worst" option while Ireland had been "bounced" into the 2010 bailout.
While Mr Cowen can hardly be faulted for seeking to portray his record in the best possible light, his testimony merely reinforces the suspicion that the Banking Inquiry is barking up the wrong tree.
Who did what in September 2008 or November 2010 is purely of interest to political anoraks.
It should now be as clear as daylight that both the bank guarantee and the bailout were the product of decisions taken many years earlier.
Unfortunately, neither the members of the Inquiry or the former politicians and officials appearing before it seem to have any desire to explore the circumstances surrounding the making of these decisions and their later consequences.
These decisions include the original benchmarking of public sector pay in 2002 and the second tranche in 2007. They also include of the complete failure to rein a booming property market with average house prices trebling in the decade to 2007?
Another issue meriting investigation was the narrowing of the tax base so that the exchequer became dangerously dependent on once-off, property-related revenue - the collapse in the property market after 2007 left a €10bn hole in the Government's annual revenues.
DECISIONS
However, even if the Government had got all of these decisions right it is still probable that this country would have been in dire straits after the 2008 global financial crash. Yes, the quality of domestic decision-making was pretty dreadful during the Celtic Tiger years but these bad decisions merely exacerbated an already bad situation.
While the timing is coincidental, it is entirely appropriate that Mr Cowen gave his evidence to the Banking Inquiry in the same week as the long-running Greek economic crisis finally came to a head.
As the Greek situation illustrates yet again the flaws in the design of the single currency, we in Ireland would do well to bear in mind that we too have been among the victims of the Euro.
Until we joined the single currency the volume of Irish bank lending was largely determined by the amount of money the banks collected in deposits. As late as the end of 1997 almost 90pc of Irish bank lending was funded by Irish bank deposits.
That all changed after we joined the Euro at the beginning of 1999. Suddenly the Irish banks could borrow from banks anywhere in the Eurozone. Just to add even more fuel to the fire, Irish interest rates halved as they converged to Eurozone levels.
Over the following decade, while domestic deposits tripled, total Irish bank lending rose almost seven-fold as the proportion of lending that was funded by domestic deposits halved to just over 40pc.
Faced with such a tsunami of cheap money how could any country have coped? The example of Spain, where the Spanish central bank is generally reckoned to have done a much better job than either its Irish or Greek counterparts, suggests that it couldn't.
So why are we hearing nothing about our membership of the Euro and its negative side-effects from the Inquiry? It is, to paraphrase Oscar Wilde, the truth that dare not speak its name.
If the Inquiry is to have any value then it must unearth the truth behind the events that ultimately led to the collapse of the banking system and the bankruptcy of the Irish State. Unfortunately, based on what we have seen so far, it isn't even asking the right questions.