Setting the record straight or just getting the ugly blame game out of the way?
The Taoiseach has embarked on what’s been described as a “media blitz” in the last 48 hours to defend his tenure as finance minister from 2004 to 2008. There was a 7,200-word speech to a North Dublin Chamber of Commerce function on Thursday night, followed by an interview on RTÉ Radio yesterday and then a briefing with political correspondents. This from a Taoiseach who is much more circumspect about engaging with the media than his predecessor, Bertie Ahern.
So why now? Mr Cowen’s explanation is simply that the time was right. Up to now, he says, he has been focused on solving the banking crisis. All the main Government policies on that front – the bank bailout, NAMA, etc – are now in place. So Mr Cowen felt he could proceed to “set the record straight” and counteract the Opposition “revisionism”.
It may be that simple. Or it may be, as Fine Gael alleges, that the Taoiseach simply wants to preempt the findings of the preliminary inquiries into the causes of the banking crisis.
Earlier this year, the Government announced that two “scoping” reports would be carried out into the crisis, and these reports would then set the parameters for an official Commission of Inquiry.
The scoping reports are due to Finance Minister Brian Lenihan by the end of this month. If Fine Gael is right, Mr Cowen is simply getting his defence in first before one or both of those reports point to mistakes made during his time as finance minister.
Another possible reason is that Mr Cowen may want to get the ugly blame game out of the way so that he can move on to better things later in the year.
If the economic forecasters are to be believed (and people take such forecasts with a strong dose of caution these days), growth will resume later this year. It will be tepid, but it will be growth nonetheless.
If and when that happens, Cowen will want to claim the credit, saying he took the tough decisions to get the country through the crisis and better days have arrived as a result. However, if the media debate at that point is still focusing on who’s to blame for the crisis, Cowen will have a hard job claiming any of the credit.
Or it could be much simpler: that Mr Cowen has finally heeded the message of angry Fianna Fáil backbenchers to sell the message better.
“We are where we are,” he said yesterday. “We have a job to do and we have to get out there and communicate our message, and that’s an issue that’s been raised with me by parliamentary colleagues, and I take it on the chin and get on with it.”
But now that he has gone public with a staunch defence of his record, does it hold up?
Mr Cowen claimed in Thursday’s speech that the Government had not been asleep at the wheel during the boom and impervious to risks in the banking sector.
“It has since been alleged that no action was taken by the Government to deal with these risks. This is simply not true,” he said.
Cowen pointed to four actions taken by Government in the period prior to the crisis – two of which were taken by him, and which are therefore worth examining.
The first was his decision on Budget Day in December 2005 to abolish a wide range of property-based tax incentives.
But by Mr Cowen’s own admission, these incentives should have been abolished “many years” earlier. Admittedly, he only arrived in Finance in 2004, but the belated abolition of these reliefs hardly serves as a ringing endorsement of an administration he claims was alive to the risks.
The second was Cowen’s decision not to “abolish” or “dramatically reduce” stamp duty.
“Put simply, I felt that calls for the abolition of stamp duty were simply irresponsible. I, therefore, strongly resisted such demands,” he said.
Yet in Cowen’s last budget as finance minister, delivered in December 2007, he changed the stamp duty system so that people would pay less. The cost of his cuts was estimated at €190m, with Mr Cowen saying they would help “home buyers and the housing market” – in other words, encourage people to keep buying.
This came at a time when, by Cowen’s own acknowledgement in the budget speech, the global economy was “beset by uncertainties”.
Despite that, the budget as a whole was a surprisingly expansive one, with Mr Cowen announcing growth in total spending of 8.6% and bringing state borrowing to then record levels to fund it.
None of this seems to tally with his argument that he was truly cognisant of the emerging risks and acted smartly to counteract them.
And it’s not as if there were no warnings. Reacting to that speech, Labour’s Joan Burton posed a simple question: “The changes currently taking place in the US in the area of credit have not yet fully worked out. I would like to know whether the minister has a plan B should the chill winds we are experiencing become worse.”
It seems now as if he didn’t.
