Saving the economy - Bank plan is still the only game in town

NOW that we’ve had a few nights to sleep on it the euphoria that greeted the Cowen/Lenihan initiative is tempered ever so slightly.

A great cloud of confusion and complexity throws its shadow over the move. The consequences of failure are almost beyond comprehension.

Like an exhausted gambler down to their last few chips we are struggling to put a brave face on having to gamble far, far more than we can afford to lose in a desperate effort to recover something we should never have gambled in the first place.

A feeling of impending collapse has been replaced by a flicker of optimism encouraged by possibility; something, anything, has been done and it might just work. No matter that, if it all goes wrong, each and every one of us, our children and their children too, will have liabilities that will knock this country back 25 years.

We do not know how much we might be liable for — does anyone? — and we do not know how much the banks may have to pay for their get-out-of-jail trump card.

That euphoria is qualified too by the enraging notion that the suits are getting away with it again. Rage because we did not learn the lessons of Insurance Corporation Ireland, the Rusnak fraud, Ansbacher, the DIRT scandal, dodgy off-shore accounts encouraged by banks or the PMPA collapse.

No matter that, like Damocles, we have a sword hanging over our heads because we allowed our sycophancy and our stupid deference to delude us into thinking that the banks “would do the right thing”.

Rage too that behind closed doors the “court of directors”, as they grandly style themselves, have probably opened the champagne already and are laughing all the way to a taxpayer-guaranteed bank.

Already the vocabulary is being managed, already we are being cowed, told that this is not the time for recriminations.

If by recrimination it is meant putting a powerful set of controls in place, a regulator with real teeth and the resources to do their job, then bring it on — and charge the banks whatever this policing system costs to establish and run.

If by recrimination it means telling those who can earn €2.972 million in 2007 even after a 25% pay cut — Bank of Ireland chief executive Brian Goggin — or €2.1m despite a 14% pay cut — AIB chief executive Eugene Sheehy — that the game is up and that banks cannot jeopardise this society in the pursuit of profits, then most certainly bring it on.

Though the banks are easy targets right now it must be remembered that our Taoiseach was finance minister while these excesses were permitted.

His particular road to redemption lies in doing what he should have done a long time ago. Sadly, his earlier laissez faire indulgences have made today’s challenges all the greater but he must firmly assert the primacy of the state over any institution contained within it, even if it once was a private enterprise.

Fianna Fáil has secured its position, at least in part, by giving lip service to the principles of social justice and inclusion. At every election the party invokes the radicalism and inspiring determination of its founders to reassure us that it still has a commitment to all citizens of this country. If it has, then there has never been a better time to prove it. Fianna Fáil may have closed the tent at the Galway Races but they also need to show that the culture associated with it is as dead as the notion of small government and the free market.

We should remember too when the debate about privatising our health system comes around again that we would be entrusting our health service to the very profit-based culture that has got us into this mess.

Most especially, we should remember these days and our utter powerlessness when a Government figure hints that they are considering privatising utilities, say our water services or maybe the ESB. We should remember whose interests come first in the minds of investors or their bankers and ask what it is that private capital can do that an efficiently organised state cannot.

And of course we are all culpable too, for believing that it was all so easy and that the day of reckoning would never come. We were happy to be led up that seductive garden path and we may have to pay for that foolishness in a way we never imagined.

Nevertheless, the Cowen/Lenihan initiative is the only game in town and we must all hope that it, in whatever form it eventually takes, succeeds.

That has to be our immediate hope. But we must also curb the power of the banks and make sure we finally learn the lesson that unfettered greed will destroy everything in its path.