Those who wanted to make money could do so if they were willing to do whatever was necessary and take whatever chances were needed.
They were helped by loose and sometimes even non-existent regulatory environments along the way. A laissez-faire attitude and behaviour persisted and continues. The belief is that the market is king and will balance itself out. The truth is much different.
World economies suffered massively and people have been driven to despair as governments propping up their financial institutions seized more and more of citizens’ resources to prop up their economies. The ordinary people of Ireland have to date suffered six long years of austerity and been forced to borrow €67bn from our so-called friends.
The term ‘ordinary people’ is a reasonable one as those who perpetrated our problems have only suffered marginally. We will be paying that loan back until 2031 as our ‘friends’ seem to be reneging on an agreement to help us out. We were de facto supporting their banks to the detriment of our economy. But that’s appreciation for you.
Despite the impact of such a laissez-faire attitude to regulation, it appears there are very few willing to do anything about it. In fact, despite everything, this attitude is being encouraged.
In his article in this newspaper earlier this week, Kyran Fitzgerald referred to the findings of a US Supreme Court case which has the potential to destroy what’s left of the Argentinean economy and others, including our own.
Paul Singer, of the major hedge fund Elliott Management, specialises “in the acquisition of the debt of deeply troubled sovereigns at knockdown prices”. The general objective is to sell debt on or back to the sovereign and make a lot of money. In the meantime, the sovereign gets back to balancing its books and tries to grow its economy again now that the massively discounted debts have been passed on.
The IMF, lender of last resort, favours the sort of sovereign debt restructuring which Singer and his fellow vultures are opposed. They are what we call hold-outs; they hold out until they recover the full original value of the debt. It’s like repeatedly trying to get blood out of a stone.
According to a report in The New York Times, Singer “stands to receive more than $3bn on bonds that only have a face value of $650m”. Indeed, the newspaper further speculated that Singer “could get closer than he’s ever been to taking down an entire country”.
There is something radically wrong in a world where an extremely wealthy individual or company, which has no other purpose than to make money by whatever means, can destroy an economy because of nothing more than greed.
Unfortunately, we have our own vultures as analysis of the report from the interim administrator of the Central Remedial Clinic points out. Fergus Finlay in this newspaper on Tuesday described the report as revealing “a portrait of complete and utter moral bankruptcy”.
It is impossible to disagree with that view. The behaviour of the board and senior management is even more deplorable when you consider the function of the organisation.
Rather than spend the money obtained through fundraising from the public and other activities on its patients and those in its care, it used it to bolster the lifestyle of those in the inner golden circle in the company and pay themselves handsomely, even as the country suffered.
We need to clean our own stables as well as urging our friends to clean theirs. You might ask yourself why we or they haven’t done so already.