As we, our children, and maybe our grandchildren too, will have to pay for our 2008 economic collapse it would be wise to learn the lessons that catastrophe offers.
Many of them revolve around the banks’ indifference to the idea of social responsibility if that commitment limited their capacity to generate profits.
The pre-collapse figures recorded by Anglo Irish Bank, when that institution was imagined a visionary business rather than a mad hucksters’ tea party, sparked a contagion that otherwise sober bankers found irresistible.
“If Anglo can do it why can’t we?” became the mantra.
In reality, that envy-bleating should have been the death knell for the freewheeling capitalism that earned Dublin the unattractive tag as the “Wild West of European finance”.
But was it?
A report by American and Danish academics that describes Ireland as the world’s biggest corporate tax haven suggests not.
Economists at Berkeley and the University of Copenhagen found that multinationals filtered €90bn through the Irish system in 2015.
That was more than all of the multinationals’ profits redirected to all of the Caribbean islands.
They processed just €83bn.
Switzerland, a light touch banking and tax destination, processed a modest €49bn.
Naturally, but increasingly implausibly, the Department of Finance rejected as “overly simplistic” many of the damning findings in the Berkeley-Copenhagn report, The Missing Profits of Nations by Gabriel Zucman, Thomas Torslov, and Ludvig Wier.
The Government rejected the notion that this Republic is a top-of-the-range tax haven, with Paschal Donohoe saying we have a competitive tax policy.
These refutations seem lonely voices faced by ever-increasing challenges, especially on the issue of corporation tax.
The latest condemnation is just one of many.
The Federal Bank of New York reached the same conclusion as did Oxfam which placed Ireland sixth in a list of 15 countries that facilitated corporate tax avoidance. Ireland was described by Oxfam as a cog in a toxic global system that “facilitates worsening inequality”.
This week former Greek finance minister Yanis Varoufakis went further.
He said Ireland is a tax haven “free-riding” on the rest of Europe.
That Nicolas Sarkozy, hardly a bedfellow of Varoufakis, was as critical while the president of France is an indication of the range of voices unhappy with our role in international tax unity— as does the EC ruling on Apple’s €13bn tax bill.
The fact is, one we will have to face sooner or later, is that the vast majority of contributions to this debate cast us in the very worst light.
Even if this is a highly-politicised debate we are edging towards pariah status.
It would not be surprising if EU support on holding the line on Brexit was linked to a review of our tax laws.
The 2008 collapse was driven by the banks’ understanding of how our ambitions and greed might be exploited.
This latest report, and too many others like it, show that multinationals’ tax managers have recognised a similar vulnerability, one confirmed by our exchequer’s absolute dependency on revenues gathered from non-Irish entities.
We have not learned the lessons of 2008 and this one, when it is eventually made unavoidable, will be at least as expensive.