Wednesday, 9 September 2009

NAMA and the Demise of the Political Class

Newspaper reports suggest that embattled Finance Minister, Brian Lenihan came out fighting in the past week, strongly defending his proposed National Assets Management Agency (NAMA) legislation and criticising opposition party, Fine Gael's alternative proposals.

In comments attributed to him he suggested that Fine Gael's policy on NAMA could have "catastrophic consequences for both the banks and the State ." - Irish Times, Thursday, August 27, 2009. (My italics). Exactly what those catastrophic consequences might be hasn't been spelt out. Nevertheless, the comments themselves are at least revealing about the current political climate.

Most people in Ireland would probably react to a statement like that along the lines of: 'So the consequences will be catastrophic for the banks and the state, but the rest of us should be alright, right?' The rest of us being those whose jobs, careers, prospects or livelihoods aren't directly connected with the industries of banking or government!

Of course there are those who will argue that we're all dependent in some way on banking or on government, whether as tax payers, mortgage holders, debtors etc but it is an argument that is specious at best. All of us depend on the agricultural sector for the food we put in our mouths (and everyone eats don't they?) but when is the last time you heard of farmers seriously holding the whole country to ransom? I mean to the point of threatening to sink us all?

The mystery that needs untangling is why nobody seems able, or willing to put aside sectional differences, to come forward with a plan that ensures the national survival of the Irish people as a whole, not just those whose jobs are based on banking or government. In other words all of us, including them, but also - the rest of us. I say this because, on the face of it at least, the way the issues stands now, it really does seem to come down to a matter of national survival.

I'm not suggesting that those in political and governing circles don't 'care' the nation's interests. Certainly they would have a sense of the national interest as everyone does. The problem is that, for most people (all of us if we are to be honest), defining the national interest invariably begins by looking at it in relation to one's own immediate interests followed by the interests of your closest circles.

The banks believe that if they go down, we'll all go down with them and they seem to have been successful in converting the Government to this view. But there are others who disagree. David McWilliams, one of the first advocates and possible author of the bank guarantee scheme, has since come out against NAMA:
"The banks are now the biggest liability we have and keeping them alive at all costs - which was, on balance, the right thing to do a few months ago - is beginning to look like the least beneficial route. ...The banks are still giving the State the two fingers. Having both the NAMA and the guarantee gives absolutely no incentive for the banks to get their house in order." - Banks giving us two fingers don’t deserve State bailout
Someone else who threw his hat into the ring recently is former Taoiseach, Garret FitzGerald. In fact he came out against his own party's proposals in an article entitled Government must not fall until crucial measures implemented - Irish Times Saturday, August 29, 2009.

"Responsible opposition is vital if the State is to be kept out of the IMF’s hands" he chides before warning:
"No worse fate could befall an opposition than to precipitate themselves into government by defeating measures, the rejection of which could throw our State into the hands of the IMF."
In any case:
"One can readily imagine the relief many in government might feel at finding themselves freed of their responsibilities in circumstances that could then provide them with an unexpectedly good chance of returning to power if their successors failed to resolve the situation."
For Garret FitzGerald the issues seem to boil down to a vague sense of national pride muddled with the survival of the political establishment to which he belongs, and which almost seem to represent a class of its own these days.

If the IMF do become involved, they will seek to implement very drastic measures, affecting every aspect of economic activity and social life in the country. Furthermore, they are far enough removed not to care too much about you and me. You only have to look to other countries to see what they are capable of. Many will face ruin, some in terms of their actual livelihoods, others in terms of their political careers. The latter however are the ones with the connections so they'll probably come out it all a lot better than most.

Garret FitzGerald sounds like the voice of a section of the Irish political class, whose main concern is: 'Either we implement the measures demanded or some outsiders will come in and do it for us, casting us aside in the process'. That would be humiliating, but humiliating for whom and is this type of humiliation really the worst of what is in store?

The argument seems to be that our own, homegrown political class would be more caring and protective than the IMF, that they would represent the best shelter in the present storm but where is the evidence for this? What can they do to save us, assuming that they are motivated by something purer than simply trying to save themselves?

At moments of crisis thoughts turn to survival but is it the survival of the entire nation or merely the political survival of a small few? If it is the case that the political class are desperately trying to cobble together a strategy to save themselves, one feels nevertheless that it's already too little, too late. The stakes have become much bigger.

The economic base, upon which the political foundation rests, has become seriously eroded in a very short space of time. Should the political class find a way to harmonise their tune to the IMF's hymn sheet, this in all probability will not reverse, but actually accelerate the trend towards national decline and ultimate extinction. It's like a servant trying to serve two masters. It's bound to end in tragedy.

This could be what is meant by "catastrophic consequences for both the banks and the State" in the comments attributed to Brian Lenihan.

But the question still remains - and what about the rest of us?

Copyright © Oscar Ó Dúgáin, 2009

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