As long as we dance to bankers’ tune, we have to suffer these budgets
Well, that is nice to know, isn’t it? After we have been bludgeoned for years by mainstream politicians and a craven commentariat into believing that, as one of them put it, “we have all partied too much”.
Since Kenny has a different take on things, all of a sudden, perhaps he would tell us why we should continue to pay the tab, in so many bitterly painful ways, which someone else left on our table, through the budget his government is imposing on the nation?
And perhaps Eamon Gilmore, who briefly blustered about “Labour’s way or Frankfurt’s way” to buy a few cheap votes, might now tell us why the role of the Labour Party seems to be hold down the poor and disadvantaged on the floor, so that Frankfurt can get a clearer kick at them? Or, in more parliamentary language, so that almost the entire debate about the budget has been framed through posing painful and divisive choices, rather than tackling the issues that underlie the crisis.
Do we value the education of a special needs child above giving humane care to an elderly adult? Should we sacrifice the vibrancy of our cultural life for the protection of our environment? Or vice versa? Should we cut our social welfare payments to the bone, in exchange for a vague hope of ‘growth’ at some unspecified time in the future? What if these are not the right questions to be asking? What if the real questions are the ones that the Taoiseach absolutely failed to tackle in his address to the nation? If we are not responsible for the crisis, who is? And how can they be made to pay for it? These are not popular questions at the moment. Crisis brings panic, and panic brings a kind of hysterical consensus: all voices that dissent from the hastily agreed solution are seen as part of the problem.
Any lemming understands this. When the majority have agreed that the route to the cliff’s edge is the only road to safety, then those who try to move in another direction, or even simply try to stay still and think a bit more, get trampled to death.
But the expertise of economists should come under very serious scrutiny after the experience of the last few years. With honourable exceptions, very few of them saw the faintest shadow of the approaching crisis. Nor did the prestigious ratings agencies, though entire nation states, and now the entire EU, still shiver in panic whenever these geniuses threaten to shave an ‘A’ from a country’s credit rating.
So perhaps we should stop asking economists for answers and start asking different questions altogether, and ask them of ourselves. Questions about what makes our lives worth living, and about what kind of society we want.
The first inkling I got of this crisis came on a party on the eve of St Patrick’s Day, 2008, in New York. The conversation was generally upbeat. Just the briefest of shadows was cast by the mention of the collapse of a bank I had never heard of, with the exotic moniker of Bear Stearn. One of our company turned out to be that most esoteric of creatures, a broker.
Bear Sterns was bad, he told us in a confidential whisper. But there is much, much worse to come.
Of course, we all asked why.
Well, he said, the international markets are now awash with something called derivatives.
None of us knew what he was talking about. Neither, and this was the frightening bit, if he was right, did he. Nor did any of his colleagues, at least not to the point where they could be confident about how these bizarre financial products — another new phrase for me — would behave.
In the simplest terms, he told us, derivatives were bundles of debt, repackaged and sold on so many times, through so many agencies, that no one was sure anymore who was responsible for them. These packages were somehow tied into the massive sale of mortgages to people who could not afford them. I
If these bundles started to unravel, he said, then the whole international financial system would unravel with them.
Six months later, I was back in New York, and that system was unravelling like mad. Lehman Brothers had gone down, the Bush administration was pumping trillions into the banks, and then admitting it hadn’t a clue what the bankers were doing with the people’s money.
I found myself talking to another broker, a rather visionary man who did ask unexpected questions, about how we should account in financial terms for the damage we do to the environment.
Looking at the stunning view from his 34th floor offices, I could not resist asking him why none of his fellow financiers were catapulting themselves from their offices in guilt and shame at the misery they were causing.
He had the answer on his desk. It came in a Mexican newspaper with a delightfully simple cartoon that said in essence: ”1929: Suicidal bankers leap from their windows. 2008: Triumphant bankers push everyone else out their windows.”
Until we stop jumping every time the bankers tell us to, and start pushing back, and pushing hard, we will have to impotently suffer budgets like yesterday and today’s. And not a day longer.
