Dermot Gleeson renews his apology
Over the past few years the citizens of Ireland have, collectively, been plunged into crippling debt likely to last generations. This was done, ultimately, by a fairly small group of politicians, bankers and property speculators. Our response has been fascinating. With the singular exception of the water privatisation* issue (which has sparked protest and may yet prove a rallying point for a broader “anti-austerity” movement**) we’ve pretty much accepted it with a reluctant shrug. There’s been plenty of anger, don’t get me wrong. But it tends to be seething and grumbling and the narrowing of the eyes with us (rather than riots and petrol bombs and voting for socialists).
I could write at length about why the Irish collective psyche has reacted this way, but I’ll leave that for another day. For now I just wanted to highlight the weird way in which powerful establishment figures involved in the financial crisis occasionally pop up in the media ostensibly to “apologise” (or in this case “renew their apology” – how weird is that!?) but actually seem to be insulting the very people they have completely screwed over. What other explanation can there be for former Allied Irish Bank chairman Dermot Gleeson’s testimony in front of the Oireachtas Banking Inquiry today?
I feel confident in saying that every person reading this post had learnt and understood, by the time they were 10 years old, that “but everyone else was doing it” does not constitute a legitimate justification for doing something. Parents and grandparents will ram the point home with questions about hands in the fire and jumping off cliffs. We knew, as children, that doing something wrong because “the others were doing it” is bullshit plain and simple.
So I feel no hesitation in shouting “Bullshit!” when Dermot Gleeson acknowledges that yes, absolutely, AIB was indeed engaged in:
lending that was ‘expansive’ at a time of excessive risk taking on the back of a construction and property-fuelled boom
but that no single lender could have done anything about it. Because:
“if AIB had stopped lending, their competitors would have happily stepped in to satisfy the demand”
It’s hard to believe, I know, but that really is the former head of Ireland’s second biggest bank telling a government committee that because all the other banks were running up huge unsustainable debts that would one day collapse the economy, it was OK for his bank to do it too. More than that, it was the government’s fault for not stopping him.
The regulator was “hopeless” he claimed. I can’t be the only person made furious by that, right? The man was in a powerful position with a huge amount of public responsibility… but he didn’t comprehend that the point was not to see how many insane things he could do without falling foul of the regulator. We clearly need regulators (not least because of eejits like this guy) but if you’re in charge of a bank deemed of national importance and structurally vital to the stability of the public finances and you’re playing a game of chicken with the regulators. Then you’re doing it wrong!
The heads of our major banks should not be tasked with seeing how close to the edge they can bring the institution in the name of ever increasing “shareholder value”. These banks, sadly, are too damn important to us – the people – to act in so reckless a manner. Or be allowed to. And if we’re still employing that kind of fricking idiot to run our big institutions (hint: we are, because absolutely nothing has changed in that respect) then we need to stop right now.
That said, Gleeson is correct in implying that the government are far from blameless… everyone involved should be writing their memoirs in jail. But as the head of the second biggest bank in the country it was at least part of Gleeson’s job not to run the bloody thing into the ground and the country with it. It’s not acceptable for the head of AIB to steer the institution in whatever reckless direction he fancies so long as he manages to find a way around government regulation and oversight.
Mind you, you kind of have to admire the way he so succinctly illustrates the central attitudes of capitalism with his every utterance.
Also let’s be very clear about something… if the second largest bank in Ireland had actively tried to put the brakes on during the run-up to the collapse; while it clearly would not have prevented the crash, it’s not unreasonable to imagine the country would be in slightly better shape today… a few billion less in debt at least.
And because that equates to a few billion less for the salaries of doctors and nurses and teachers and policemen and the coast guard… well, let’s just say that Gleeson’s failure to learn a lesson most of us grasped as children has caused a great deal of suffering and maybe even cost a few lives. But hey, he’s sorry. So leave him to his wealth. We will condemn him to the inconvenience of appearing before committees every year or two – that’ll surely deter future bankers from destroying the financial system.
* But it’s not privatisation, I hear you object. To which I say “Feck off!” And loudly at that. I’m well aware that this first step does not represent privatisation, but it takes a special kind of naive to think that the ideologues who forcefully rammed this current system down the throats of a defiantly unwilling electorate do not have privatisation as an ultimate endgame. We have been forced to borrow money to install a system at our expense that is perfectly designed to control, monetise and profit from our water usage. Even if the current gombeens in government aren’t aware of it, they’re setting that up to be sold off down the line as a nice little earner for the shareholders of Global Water Inc. (registered office: Cayman Islands). Why the hell else oppose – even in principle – a constitutional amendment on public ownership?
And let’s not go on about water being a scarce resource and metering being necessary to curtail usage. Study after study has shown that water-metering produces a short-term drop in usage followed by a return to previous levels over the course of a relatively small period of time. The same amount invested in infrastructure repairs produces a larger saving over a much longer period of time. Also… in global terms, yes. In global terms water conservation is a huge problem. In Ireland though, it’s just an infrastructure thing. We’ve got all the water we need falling from the sky and draining off the island into the sea. All the bloody time. The raw resource is there to be used and is effectively renewable so long as the Atlantic Ocean stays roughly where it is. With a growing population and plenty of money, governments over the past 20 years could have invested in a modern water collection, storage, treatment and distribution system and there simply would not be an issue today. They could have done that. But they didn’t. Instead they gave massive tax breaks to already wealthy people and proceeded to somehow allow the banks to magically create and destroy tens of billions of euro doing god only knows what, high on coke and spreadsheets, and saddling bus-drivers, hair-dressers and pensioners with the bill.
Now we’ve gone and spent another fortune, on tick, not to upgrade the system and fix the leaks and dig a reservoir or two… oh no, we’ve decided to add water-meters to every property in the country. Seriously folks… that’s only the kind of decision you make if privatisation is the endgame. It doesn’t make any sense otherwise (though maybe I’m giving this thing too much credit when I assume it makes sense on any level at all).
As a final thought, can I also point out that at a symbolic level, “charging the poor for water” has got to be one of the most singularly unchristian things I can think of. I’m not suggesting religion should play a part in public policy (it shouldn’t). I’m just suggesting that when someone betrays even the best, most enlightened, most cherished core values of their faith in the name of economic ideology… they probably can’t be trusted to take care of anything of real value.
** I put “anti-austerity” in parentheses there because I don’t entirely like the phrase. Firstly because I don’t necessarily think “austerity” is always a bad thing. Indeed it may well be appropriate for western societies to take a more austere approach to resource consumption in general. And how we do that should be the subject of informed and rational discussion (like that ever happens when it comes to important subjects). Secondly though, because I don’t think what we’re seeing right now is austerity – certainly those actually pushing and promoting the policy don’t seem to be living any more austere a lifestyle than they were prior to it. So while “anti-austerity” is a useful label because most people pretty much understand what you mean by it… it’s actually a little misleading.
The very foreseeable economic collapse in many countries caused by the pursuit of obscene profits finalized my distrust of government. People, whether heads of banks or working stiffs, will seek profits if they have the capability.
Policy makers and regulators have the market knowledge and duty to prevent exactly the sort of behaviours that caused the collapse. When government isn’t working for the benefit of their population, the question arises as to whom they are working for. Certainly not me.
April 23rd, 2015 | 6:02pm
by Jim V