Skip navigation

Tag Archives: banking

Before reading watch and listen to Yanis Varoufakis in this Youtube clip. He’s not talking revolution. He’s not even talking socialism. Indeed he’s on about that most liberal of fashions, value free, “evidence based” policies. How this could lead to a crisis requires explanation.

Ok, that was the former Greek Finance Minister making a persuasive case for old fashioned, liberal Keynesianism. This was a view that was growing in popularity in the public press and on-line in the months before the Greek election. Reading and listening to Syriza before the election it seemed that they were just doing the routine, familiar, populist anti-austerity pitch for votes. After the election they changed to an emphasis on negotiation and the sort of position outlined in this video. It was a very encouraging development and it raised the hope that Syriza might strengthen or lead the emerging consensus. That consensus was certainly not socialist or even mildly egalitarian but rather the creation of a functioning liberal economy – yes, ripe for leftward reforms but the left would defer that until a reasonably stable and prosperous liberal economy had developed. Clearly it would be difficult if not impossible to get a liberal deal of this kind through the Greek parliament without the support of the older centre-right and centre-left parties. However, somewhere during the months of negotiation the Keynesian position disappeared. Towards the end the German Chancellor insisted that any deal would have to be approved by the Greek Parliament. In doing so she inadvertently hastened the end of negotiations and saved Syriza’s unity. In the week before the IMF payment was due there were two sets of proposals: the creditors’ ultimatum and Syriza’s.  As the Greek Finance Minister insisted, there was nothing much between them. Then the P.M. decided on a referendum to accept or reject the ultimatum. There needs to be an enquiry into these negotiations because it is simply not plausible that the argument advanced by Yanis Varoufakis in this video caused a crisis.

Advertisements

The following is the truth as it appears in the Sports section of the Irish Times.

“The work was simple. I used to go around the small towns and villages and these estates going up left, right and centre. Cootehall! Tulsk! Frenchpark! Where were all the people going to come from? I remember saying to someone around 2004: ‘this thing is going to fu**ing blow up sometime. But hopefully not in the next 12 years and we will get a good touch out of it’. – Shane Curran, Veteran GAA goalkeeper quoted in The Irish Times Oct. 4th 2014 http://www.irishtimes.com/sport/gaelic-games/gaelic-football/colourful-nonconformist-shane-curran-always-ready-to-think-outside-the-box-1.1951420

This man like thousands of others is not stupid. He could see the evidence of the property scam all around him and he knew damn well that it would end badly. He discussed it with lots of other people who like him were perfectly capable of interpreting the evidence that was all around them. However, most commentators these days would have us believe that Shane Curran was remarkably perceptive and almost alone in reading the signs.

Why is this lie so frequently promulgated? Well, it’s like this. Unless the majority is prepared to believe the lie, a large number of people face a fall. The truth is that a person would have to be monumentally stupid or to have been willfully blind to have failed to see what Shane saw. The next question may be shocking but it needs to be faced. What jobs in Ireland are suited to the monumentally stupid or the willfully blind?

The answer of course is few, if any. Certainly stupidity on this scale should rule out journalism, broadcast presenter, teaching and certainly employment in any part of banking or financial services. Our problem is that those proven to be too stupid are still in place.

See also:
https://colummccaffery.wordpress.com/2013/05/12/they-are-known-to-be-useless-and-they-are-all-still-there-a-reminder-from-eddie-hobbs/
https://colummccaffery.wordpress.com/2010/11/24/time-for-a-clear-out-who-misled-and-who-remained-silent-as-a-completely-irish-made-fiasco-developed/

On this morning’s Marian Finucane radio programme * a discussion began about the culpability of former Taoiseach, Brian Cowen, for Ireland’s economic mess. From former minister, Mary O’Rourke, came the familiar routine of “we all had a party, so no one is at fault” and then Eddie Hobbs offered the view that the ordinary person couldn’t be expected to understand an economic bubble and that those he calls “gatekeepers” failed to warn the general public.**

Eddie is wrong. Anyone with normal intelligence, a basic education and a little interest in their surroundings could see that – whatever about the wider world – Ireland was headed for a fall. Failing to see this required enormous stupidity or wilful blindness. It was a topic of discussion among ordinary people, many of whom could see that the property boom was a scam, bound to end. These ordinary people held on to their savings and/or didn’t borrow to buy property.

Eddie is right, however, to blame “gatekeepers” for failing. The term usually refers to media workers but Eddie included public service economists. Two points need to be made. Firstly, the distinction is correctly drawn here between people who are paid to think, write, speak up and manage and the rest who are merely expected to do these things. It is the difference between citizens and those whom society expects to do a particular job because they are paid for it. Who are these people? Clearly, elected politicians, advisers, civil servants, economics professionals, journalists, producers and researchers are included but so too are public commentators, lecturers, teachers and managers – particularly managers in banking and finance.

Secondly, nothing whatsoever has been done about this failure. Let’s be blunt: If an electrician or plumber failed to perform to the point of wrecking the house, they’d hardly be let continue. (Well, in view of the dangerous buildings now coming to light, that may be a topic in itself.) In the case of those paid to think, write and speak up … Nothing! They are all still there. They did not do what they were paid to do and they are all still there. They are known to be useless and they are all still there.

They didn’t fail to perform some difficult task. There are many failures trying to find cover in the fabrication that Ireland’s economic crash came as a surprise. It bears repeating that only a complete fool could have confused a building boom with a productive economy and only the wilfully blind could have failed to see the bricks and mortar evidence accumulating across the country. (That some did see the problem but remained silent is a different kind of failure. ***)

It is simply implausible to suggest that some kind of recovery could be achieved while so many of those paid to think and to manage are demonstrably unable or unwilling to do their jobs.
__________________________________________________________________
* http://www.rte.ie/radio/radioplayer/rteradioweb.html#!rii=9%3A10146436%3A70%3A12%2D05%2D2013%3A
** At about 11.00 mins. into the programme.
*** https://colummccaffery.wordpress.com/2010/11/24/time-for-a-clear-out-who-misled-and-who-remained-silent-as-a-completely-irish-made-fiasco-developed/

Breda O’Brien in The Irish Times of Saturday, February 20, seeks to minimize the blame which should attach to those who did not rise to protect children. She reckons that they are being too strenuously tested, that few of us would pass what she calls the “challenge-the-culture test”. How depressing! She is very wrong to set such low standards.

 Excusing inaction on – or even participation in – wrongdoing on the basis of a dishonest understanding of “culture” has become a familiar evasion in Ireland and one that seeks to give a lick of dignity to a life or a career that is in truth unworthy of a citizen – or indeed unworthy of any kind of right thinking person. It is shameful and slavish to claim that as long as misconduct is so common as to attract the term “culture”, one can avoid blame for letting it happen. It is alarming that so many people seem to think that the holder of a post is not required to take some sort of stand against wrongdoing or stupidity.

 
It is certain that many of our scandals rest on past acceptance of this contemptible nonsense. Now it needs to be up-rooted to ensure the appointment of people of better character.

Very few of us will get through life without being asked at times to make some kind of stand and it could be argued that such tests are necessary to a full life. In extreme cases the risks will be too great. Standing up might result in death, imprisonment, exile or loss of a job. Faced with such risks, no one could be blamed for keeping quiet and surviving. However, when the risks are merely to one’s popularity, one’s quiet life or one’s chances of promotion, failure to take a stand should be condemned.

It is certain that in the case of extensive child abuse removing the “culture” fig leaf should cause many to fall from respectability. The excuse is, however, more widely used. For example, employment in the banking industry during the damaging years asked questions about courage and integrity. Now only those who spoke out should remain in anything but junior positions.

In short, whining about “the culture of the time” or “the culture of the industry” etc. is not an excuse for complicity.

It may be that we need an inquiry into the conduct of Irish banking and its regulation. However, the complexity of banking operations should not obscure the obvious. It was clear to any person with average intelligence and a passing interest in current affairs that the property bubble would end in tears. It most certainly is not true that everyone was deceived or mistaken.

Let’s be blunt: Anyone who failed to recognise the problem is not a person to be taken seriously in future. Anyone who did recognize the problem but remained silent has questions to answer. Sensible people in the banking and finance industry must have felt intimidated by the tide of nonsense in support of the clearly unsustainable; they must have had to weigh good conduct against career prospects.

Here we have an industry in need of changes in personnel. The one fortunate outcome is that people have been tested. Some have proved themselves but it is clear that those who did not speak out clearly and strongly lack the ability, integrity or courage required to manage at any level.