Who killed the Celtic Tiger?
CURRENT AFFAIRS: An unflinchingaccount of recent bank scandals is so gripping it reads like a thriller
The Bankers: How the Banks Brought Ireland to its Knees, By Shane Ross, Penguin Ireland, 293pp, €19.99
A DECADE AGO, there was a spate of books telling the tale of the Celtic Tiger’s birth. Now the wheel has turned full circle and this seasons books chronicle the death throes of that strange animal.
“Who killed Cock Robin?” asks the nursery rhyme and it goes on to list all who claim to have done the deed. There is just as great a cast of characters in the modern drama of who killed the Celtic Tiger, and Shane Ross’s lively book features a lot of them. The trouble is, some of these characters, now painted as villains, were also on the list of high achievers at an earlier, more innocent, time. There was a media game at the time of the last election to construct a fantasy cabinet of business men who would offer the country a no -nonsense style of leadership in contrast to the inadequacy of our politicians. Compare that list with the one on the desk of the Director of Corporate Enforcement as he investigates allegations of corporate wrong doing, dodgy share dealings, warehousing of director loans and many other practices. I suspect quite a few names would feature on both. It doesn’t take long to fall from hero to zero in the modern world.
Shane Ross is well qualified to offer an account of recent bank scandals. As a senator and polemical business journalist, he has been a constant thorn in the side of corporate Ireland and has never flinched from exposing its practices to the public gaze, as he did with National Toll Roads and Eircom. His perspective is wholly different to those who might focus on corporate wrong doing in order to undermine the entire economic system in which that style of wrong doing has become endemic. Ross is no firebrand left winger. Quite the opposite: his purpose is to expose the fraudsters for the sake of upholding the basic values of capitalism.
I enjoyed this book thoroughly. He moves the story along at a cracking pace so it reads as much like a thriller as a current affairs book. The style suits the theme, because, in this case, the truth is much stranger and more fascinating than any work of fiction. You could compare it to a John Grisham novel. The characters are now household names but they could equally be fictional creations of the type that feature in Grisham novels: the lawyers, the bankers, the accountants with eyes trained all the time on the prize of ever-greater profit, bonuses, tax breaks and tortuous clandestine deals. Of course, the compliant politicians are there as well, forever fascinated by the evident fortunes made, often directly as a result of budget changes to facilitate the interests of those who attended the fund-raising events.
Ross gives an account of one Fianna Fáil fund-raising exercise that affected me tangentially. In 2003, FF decided to create a party in-house journal. I got a copy from a bewildered constituent and was amazed at the glossy ads from almost every big-time builder and developer in business. What concerned me was the apparent ease by which the requirements of the party funding rules could be bypassed. The law placed a limit on the amount of a direct corporate donation. These ads were donations in all but name but did not have to be disclosed as such. I objected in a public statement to this sleight of hand only to get an immediate threat of a libel writ from the publisher. Nothing, of course, came of that threat but it showed the strength of the hidden FF-developer nexus that was then, and remains now, the core driving force of Government policy.
One matter Ross highlights is the role played by professional economists employed by various stockbroking houses and banks in creating the mood that inflated the property bubble. His chapter on these commentators is aptly entitled ‘Poodles and Spoofers’ and it catalogues all their shameful puffing up of bank shares and property interests right up to the eve of the crash. If anyone ever painted a less rosy scenario they were heaped with scorn and reviled as traitors. We should remember that Richard Curran’s masterly and prophetic TV programme Future Shockwas shown as early as April 2007 but his warnings fell on deaf ears and most economists he spoke to were in plain denial mode. I remember a lunch I attended with banking representatives as my party’s Finance spokesperson. Prof Morgan Kelly had written some Irish Timesarticles suggesting a possible bank crash because of over-exposure to property loans. The very mention of Kelly’s name brought a near-apoplectic reaction from the bankers present: it still does, as the recent Dublin Economic Workshop annual conference in Kenmare showed.
The economists who acted as the cheerleaders for the property bubble acted in bad faith. The French have a phrase, la trahison des clercs, the treachery of the intellectuals, for those who are aware of abuses but fail to denounce them. They are the last people we should listen to now as we seek to recover from the damage they inflicted.
There are many funny episodes in this book and readers should savour them. We laugh so as not to cry. At the end we have to cry for the country’s sake. Read this super book. Cry, get mad and get even.
Joan Burton is TD for Dublin West and Labour Party spokesperson on Finance