The banks got their bailout but what about our most vulnerable citizens?

SO we’ve bailed out the banking sector. Yes, it had to be done. But look at the risk involved.

If one major developer goes bust, that one event could still bring a bank down with it.

The collapse of one bank could easily trigger the collapse of another or start an entire vicious circle of disaster. And the resulting impact on the exchequer could wipe out all the gains of the entire period of the Celtic Tiger.

The shock to the system, if the guarantees given by the Government ever have to be called in, could be every bit as bad, or worse, than the oil shocks of the 1970s. And anyone who lived through all that wouldn’t want to go back there.

One can only imagine the agonising that went on in the Department of Finance in the run-up to the Government’s decision. This is not a department, as we’ve mentioned before, that relishes risk. It never, but never, recommends to its minister that he or she should do anything that comes even close to a risk.

In this situation, therefore, they must have been looking at alternatives too awful to contemplate.

If the Department of Finance was prepared to recommend the underwriting of bank risk to the extent it has, it must have been absolutely convinced that the heavens were about to fall in.

There has been some speculation that the Department of Finance, as opposed to bodies like the Central Bank, might actually have favoured allowing a bank or two to become insolvent.

If that course had been followed, the bank or banks concerned would have had to be nationalised.

I have to say it seems unlikely to me that the Department of Finance would ever have vigorously pushed an option like that — the entire ethos of the senior public service in recent years has moved radically away from state involvement in commercial activity.

Whatever the process behind the decision, the outcome was clear. We, the people, (or we, the taxpayers, whichever way you like to describe us) are now responsible for the health of the banking sector.

If any banker, at any level, does anything inappropriate from now on, he has to answer to us. We have suddenly become the largest stakeholders in the banking industry — and its success is now totally in our interest.

Do you know what fascinates me about this? There are three things, actually. First, throughout all the debate of the last week, I didn’t hear one single voice saying “let the private sector sort this out”.

Where were they, all those commentators, all those business leaders, all the Michael O’Learys and the rest, who are forever telling us what a mess the state makes of things? How come not a single one of them managed to be heard saying that the state would only make matters worse?

Throughout the long and tortuous negotiations on a new pay deal, the same commentators and experts were to be heard day in and day out slagging the public service, demanding pay freezes, insisting that the interests of the productive sectors of the economy had to come first. Suddenly, silence.

It appears that when things get bad enough, it is only the state, and the hated public service, that can come to the rescue. No doubt if the rescue plan goes wrong, and taxpayers’ money is exposed to risk, the commentators will all be trumpeting their certainties about the incompetence of the state.

But if they start, you can remember that they were all really busy heaving a sigh of relief at the willingness of the state to step in and rescue the banking industry.

The second thing that fascinates me, I have to say, is how little has been said, in the course of the rescue, about the cause of the disaster in the first place.

Our construction industry has been making billions in recent years, and the entire sector has become hugely over-heated. That over-heating was facilitated — for electoral purposes — by the present government, which now finds itself having to put the entire exchequer at risk to prevent consequences that mightn’t have happened had we taken a more modest approach to growth in the first place.

Greed — greed for capital, greed for profit, greed for votes — is to a considerable extent to blame for the crisis we’ve had to deal with.

But it’s apparently impolite to mention that. Yes, the banks will be expected to pay substantial fees for the support they are getting. But those fees, alas, aren’t going to come out of the pockets of individuals. In fact, don’t be surprised if the leaders of the financial sector in Ireland end up qualifying for additional bonuses because of their ability to persuade the Government to rescue them when necessary.

And the third fascinating thing about this crisis is the sense of national mobilisation that suddenly emerged.

Media and politics converged in the view that something had to be done, that big risks had to be taken, that the sector had to be rescued (even from its own bad decisions) in the interests of us all.

If anyone had argued in the past week that the bastions of the free market (when it suited them) should be allowed to sink or swim on their own, that sentiment would have been seen as irresponsible and opposed to the national interest.

Suddenly, we had a crisis where the national interest demanded that we all pull together, in the interests of rich people.

Well, we’ve had a crisis in Ireland for all the years of the Celtic Tiger — and it has affected only poor people. I’ve written here before about how, even in the midst of our prosperity, the incidence of consistent poverty among children has actually got worse.

We’ve had a crisis in healthcare for several years now — and it has led to death and suffering. It’s a crisis caused by political neglect and poor structures.

We’ve had a crisis in services for elderly people and people with disabilities. That crisis has been caused by broken promise after broken promise.

We could have fixed every one of these crises during the years of our prosperity. As a rich country, we still can.

But the fact that 100,000 children in Ireland live with inadequate nutrition, housing, and schooling — the fact that many of them are being delivered a pretty lousy start in life — doesn’t seem to merit any sense of national mobilisation.

The fact that we haven’t managed, after years of talking about it, to bring any sense of entitlement to care to people with an intellectual disability, or citizens who are old and frail, doesn’t seem to merit any sense of national urgency either.

If the banks are in trouble, we must act, and act now. We must set aside our differences and take whatever risks are necessary. The interests of the wider economy and ultimately of society demand that. But why, oh why, is that never the case when we talk about poverty?

Could it be that when all is said and done, the poor, the old and the handicapped don’t matter as much as the banks and their richer customers do?