Now let’s consider who might be really guilty of economic treason

BACK in 2001 our then Tánaiste Mary Harney had this to say: “The liberal, pro-competition, open market political outlook is present in the European Union.

It is important that we continue to develop and press the liberal democratic point of view, the one that I believe serves Ireland, Europe and its citizens best. In Ireland, we must press the case for an open, liberal Europe that has a low burden of tax and regulation on enterprise because that is the best way to secure employment and prosperity. That is what we are implementing in Ireland. It is also my priority in Europe.”

Harney was the leader of a party then, a party whose influence extended beyond its small size. The main reason it — and she — were influential was because they shared the views and the philosophy of another leading politician, Charlie McCreevy.

Throughout his career, McCreevy was never short of a point of view. He spent a great many years waiting to put his point of view into action and when he got his chance, he seized it with both hands. At the end of a hectic period as Minister for Finance, he was, as we all know, “promoted” to Europe.

As European Commissioner for Internal Market and Services, he was fond on occasions of referring to the many lessons he had learned in the Department of Finance back home in Ireland.

Here he is, speaking in April 2005: “Whatever initiatives we take, the cost of regulation has to be reduced. As Finance Minister in Ireland I saw what great entrepreneurial energies that a “light touch” regulatory system can unleash. Twenty-five years ago we were the sick man of Europe. Today we are among the richest countries in Europe. Ireland is indeed testimony to the fact that you don’t need to be rich in natural resources to generate real wealth. If that were so, Russia — with its massive resources of oil, diamonds, gold, and platinum — would be close to the top of the world league instead of nearer the bottom. The Irish growth story is a story of well targeted investment in education and intellectual capital, the advance of technology, and a human, fiscal and physical infrastructure that has proved attractive to inward investment. Economic freedom through low taxes, open borders, good corporate governance, and light touch regulation have been absolutely indispensable to the scale of the success we have seen.”

We know now — and a fair few people knew then — that the philosophy that underpinned the Harney/McCreevy political axis was a recipe for disaster. The light touch approach, the insistence on always rewarding enterprise, was the key to understanding the way they jointly ran the country, to all intents and purposes, for nearly a decade.

It started with McCreevy’s first budget in 1997. For perhaps the one and only time in his career, he began that speech by acknowledging the gift he had inherited. “1997 has been the fourth successive year of very strong economic growth,” he said. “This is once again being translated into substantially higher numbers at work — about 50,000 more this year. At the same time, inflation has remained moderate at around 1½%.”

From that moment on, McCreevy always claimed economic growth in Ireland was his own personal creation, and the result of the McCreevy/PD miracle. Having acknowledged that growth was compatible with careful management and a civilised social policy agenda, he promptly forgot it.

In that first budget he reduced the two rates of income tax by 2% and halved capital gains tax from 40% to 20%.

He introduced a range of new tax breaks — for the building of private nursing homes, for instance, and to incentivise the development of three-star hotels and better. Already, it was possible to see the shape of what was to come.

And it was to continue, year after year while the McCreevy/Harney ideology ruled. Sometimes if he got a bright idea between the budget and the Finance Act, he would simply push through his good idea as if he had mentioned it in the budget in the first place. The 2001 budget speech was silent about SSIAs, for example, but they suddenly appeared in the Finance Act of that year.

The famous SSIAs were created in 2001 and matured in 2007, just in time for the general election of that year. Wildly popular, they were to cost the state billions and never served any social or economic benefit. But they helped win a general election — and that was their main purpose.

McCreevy had used child benefit to win the 2002 general election, arranging a massive payout of increased rates (and back-money) just a few days before the election that year. Those increases were among the first things to go, of course, when the bubble burst.

But all through the McCreevy/Harney years, the resources of the state were used for tax break after tax break — to such an extent that, as we know, it crippled the entire tax base. Property development in particular was incentivised to the point where the entire economy became utterly dependent on it. Hotels, sports clinics, private hospitals, seaside towns, incentives for landlords, tax breaks for share options, business expansion schemes, reductions in betting taxes (of course) and major investments in vanity projects that were to cost tens and hundreds of millions — all these things, and more, were the features of the time.

In the years he couldn’t afford to do much tax sheltering because of an international slowdown, he introduced his mad decentralisation scheme. And of course the other wing of the axis, Mary Harney, was busy helping him to spend public money to incentivise the wholesale privatisation of our national health service.

AND it was all accompanied by withering dismissal of anyone who tried to encourage debate about the rampant selfishness of it — we were all left-wing pinkos and “creeping jesuses”. But there is one other thing we can never forget — the shadow over it all. Throughout that decade we had a highly popular Taoiseach in power. He routinely described himself as a socialist or as a champion of the poor and downtrodden. But as was alleged about one of his predecessors, he stood idly by while the version of “economic freedom” perfected by Harney and McCreevy sowed the seeds of injustice and inequality — and ultimately, economic ruin — throughout the land.

That’s why the ultimate blame for the trouble we face now belongs to the Taoiseach of that period, Bertie Ahern. In virtually every utterance he made throughout his decade in office, he claimed to espouse fairness, solidarity, care.

But he knowingly and willingly allowed the lifting of the chains from a greedy, uncivilised and rampant free market. He made enough speeches throughout that period about the importance of community, for example, and about the pressures that rapid economic growth imposed, to create the impression he knew some of the dangers that lay ahead.

But he never did anything about it. Instead, for as long as it was popular, he gave the Harney/McCreevy version of “economic freedom” the full backing of his considerable popularity. Maybe that was the real treason.