Last week was supposed to be the high point of the Banking Inquiry here with the appearance for questioning at an all day public hearing of former Taoiseach (Prime Minister) Bertie Ahern, the man people blame most for the boom and bust in Ireland.
Ahern, after all, was taoiseach for 11 years (1997 to 2008), right through the boom and up to the start of the bust, winning an historic three general elections in succession. He was the man in charge when it all got out of control and then began to collapse.
So if it was anyone's fault, it had to be his, right?
In the previous couple of weeks, before Ahern’s big box office day at the inquiry last week, the two other senior Fianna Fail politicians most associated with what went wrong, Brian Cowen and Charlie McCreevy, were also before the inquiry to answer questions in all day sessions.
McCreevy had been finance minister during the early part of the boom (1997 to 2004), and he had been followed in finance at the height of the boom and the start of the bust by Cowen (2004 to 2008), who then went on to take over from Ahern as taoiseach. Between the three of them, they presided over the madness that was the boom and then the bust that beggared the country.
Their appearance was supposed to be the inquiry's chance to expose them as the Three Stooges from Fianna Fail who were to blame for everything. And with an election now approaching, the timing of their call to appear before the inquiry was hardly an accident since it was likely to bury Fianna Fail's slim hopes of a recovery. At least that was clearly the idea the present government had when it set up this inquiry.
Of course the inquiry is supposed to be only about analyzing what caused the banking collapse and the financial crisis, but it was also clearly designed to remind voters what a disaster the previous Fianna Fail governments had been. And what a disaster it would be to let Fianna Fail back into government after the upcoming election!
As a strategy for the present government, it probably seemed like a good idea when the inquiry -- a joint committee of the Dail (Parliament) -- was set up in 2013 and began its hearings last November. But it has not worked out that way, for two reasons.
The first is that the Three Amigos, Ahern, Cowen and McCreevy, all played a blinder at the hearings and robustly defended their record in charge of the economy.
Of course, with the benefit of hindsight, they might have done some things differently, they said, and they half-heartedly apologized for anything they did get wrong. They were also sad that people had to put up with cutbacks after the collapse.
But overall they did the best they could and Ireland was now in a much better place than it had been back in the 1980s and '90s, they insisted.
Ahern mentioned that after his period as taoiseach there were a million more people in work here, and most of them are still in jobs. He was also proud that the fast growing economy made possible the generous increases in spending on health, education, infrastructure, and welfare benefits, all of which were necessary to bring Ireland up to the living standards of a modern European country.
He pointed out that state spending in the period remained at the same percentage of GDP as it had been before the boom began. So he had not let spending get out of control. What had happened was that revenue had increased and that allowed spending to be increased as well.
Ahern emphasized that he was proud of being able to increase benefits like the old age pension to a standard that the Irish people deserved. And he strongly made the point that, despite the financial crisis we have been through, Ireland today is a much more prosperous than it was before he became taoiseach.
Both Ahern and Cowen strongly made the point that it is all very well to look back now and do a lot of head shaking and hand wringing about the way things got out of control. And of course looking back now it is obvious that there was far too much reliance on the tax revenue coming in from the property boom which allowed all the extra spending. Clearly there was going to be a problem if that suddenly dried up, which is exactly what happened.
But none of the authorities inside and outside the country at the time were predicting that a dramatic collapse was on the way. Both Ahern and Cowen pointed out that neither the Central Bank nor the Financial Regulator, or independent bodies like the Economic and Social Research Institute, the biggest economic think tank in the
Country, ran up a red flag.
Outside the country the European Central Bank and the OECD also failed to cry halt; the OECD did advise caution at one point but seemed uncertain about whether there would be a hard or a soft landing here.
Ahern and Cowen also said that there was little warning from the Department of Finance here, and the general view both at home and abroad was that, although the property boom had to slow down, a gradual, soft landing was the most likely scenario.
In relation to soaring state spending during the period, Ahern also made the point that if he had given in to all the demands the opposition parties (now the government) had been making in the Dail at the time, spending would have been three times what it was.
Asked about regrets, Cowen and Ahern both said that they had placed too much trust in the Central Bank and the Financial Regulator and the other authorities who should have been warning them about the disaster ahead. They also should have been less trusting of the banks, although they made the point that the light touch regulation here was similar to that elsewhere, including in the U.S.
Overall, the impressive performances by McCreevy, Cowen and Ahern undermined the simplistic view the present government is trying to spin that it was Fianna Fail -- and only Fianna Fail -- who were to blame for our economic boom and bust. The reality is far more complicated.
And there is also the fact that when the bust happened it was Cowen's government, with Brian Lenihan as minister for finance, that did two-thirds of the fiscal adjustments that were necessary to bridge the suddenly gaping budget deficit. They did the real heavy lifting in terms of spending cutbacks and extra taxes.
The present government under Enda Kenny as taoiseach have only had to close the remaining one-third gap between revenue and spending, not that you would think that given all the moaning they have been doing about how they were left to clean up the mess. In fact all they have done is complete the adjustment plan that Lenihan had laid down and begun.
The bottom line on all this is that after Ahern's appearance at the inquiry last week, and Cowen and McCreevy before him, Fianna Fail are actually looking better rather than worse than they were before.
The other reason the Banking Inquiry has not resulted in the burial of what is left of Fianna Fail is that the backdrop to all this discussion of our financial crisis is what is happening in Greece. People here are now much more aware of how lightly we got of, or how bad it might have gotten if Fianna Fail had made an even bigger mess of things.
The Greek crisis has put what happened in Ireland, including our repayment of bondholders and our acceptance and implementation of the bailout, into a whole new perspective.
The rest of this summer, if it ever arrives here this year, will give us plenty of time to reassess the accepted wisdom on the boom and bust here and who was to blame.
We're unlikely to get much help from the Banking Inquiry which is floundering about as most people watching the hearings begin to realize there are no easy answers, no ready-made villains and no entirely blameless politicians no matter what party they were in.
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