Thursday, June 10, 2010

Corporate pirates and corrupt politicians mug the people

The banking reports published yesterday tell us little that we did not already know. A combination of bad lending choices, a property bubble, light touch banking regulation and Government economic policies wrecked the economy. These are reports of fraud, burglary and mugging of the Irish people by a gang of corporate criminals, aided by Brian Cowen and his government colleagues. They show how Cowen and Fianna Fail-led governments recklessly managed our economy and led us directly into the current financial crisis. They are an indictment of Government policy and particularly of Brian Cowen’s role as Finance Minister. They are also an indictment of the financial regulator, rating agencies and bankers.

The tragedy is that all of this could have been avoided. In the 2007 General Election all of the main political parties with the exception of Sinn Féin engaged in auction politics. They did so at a time when cracks were beginning to appear and it was clear that economic growth was unsustainable. From Fianna Fáil to Fine Gael and Labour they promised tax cuts, increased spending and a slashing of stamp duty which would have further fuelled the property bubble. They acted irresponsibly. Sinn Féin was the only party to exercise caution and prudence.

These reports vindicate SF economic policy and what we have warned about for years. We called for stronger regulation; caps on remuneration; an end to property inflation; fair tax policy based on stable direct taxation; corporate law to be improved; a tax on speculative trading; and counter-cyclical budget policies. We were dismissed by the Government and other opposition parties as ‘economically illiterate’. How ironic is that today? This is important as over the next number of days you will see desperate spinning from the Government blaming everyone but themselves and equally from Fine Gael and Labour as they engage in revisionism. It will be a phony war as both Fine Gael and Labour were part of an economic consensus along with the Government.

The focus now must move from these reports. The focus must now be on the banking inquiry, who will run it and will it be completely private? It must not be a whitewash and we need to see its outcomes acted upon. We also need to see new and robust regulation of our banking system and the removal of bankers potentially exposed in these reports. A new beginning must bring new policies and new thinking. We need to learn from our mistakes including following a pro-cyclical budgetary approach and reliance on unsustainable taxes. The slash and burn policies of Fianna Fail and Fine Gael aided and abetted by Labour will exacerbate the problem. Brian Cowen should follow through on taking his share of the responsibility and resign. Where else in the world would you be held up as responsible for such incredible failures and remain in place?

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