Kenny needs to be a powerful politician, not just a people pleaser

CRITICS of Enda Kenny have taken cheap shots at his College Green performance.

Karaoke Kenny was derided for reciting Obama’s election victory speech verbatim. I espouse the old adage: research copies many people’s work, plagiarism copies just one source. Kenny’s oratory was appropriate and fine. His controversial choice of words referring to Richard Bruton’s “personal agenda” was unfortunate rather than a deliberate snide swipe. These minor hiccups are mere sideshows to a much more profound loss of authority that is emerging for both Kenny and Gilmore.

Weekend opinion polls reflect a bounce for the Government parties arising out of the successful state visitations. Shell-shocked fragmented opposition parties pose no immediate threat to Government parties inside or outside the Dáil. With a 52-seat majority, this administration’s problems were always going to be behind them, amongst backbenchers. The handling of early skirmishes about the future of Joint Labour Committees augurs poorly for the internal authority of government party leaders. Multiple TDs attacking members of cabinet indicate the penny has dropped in terms of personal re-election prospects. Deputies assess that their chances of re-election are predicated upon being in opposition to their own government, especially in constituencies where most or all of the seats are held by FG and Labour. If this modus operandi is facilitated or encouraged for a policy item that is contained in the Programme for Government, it probably means it will be open season for disloyalty on predictable issues of welfare reform and taxation measures.

Enda and Eamon crave popularity. They want to be liked. There is no more likeable politician than Brian Lenihan. His personal charm, easy eloquence and courage with cancer made him extremely favoured. But, political populism is not actually based on likeability, but sustainable credibility. The “cheapest bailout” became the most expensive. His estimates of bank losses multiplied. Heralded corners were not turned. His standing was devalued. Disrespect destroyed his fashionable appeal. He’s still a nice guy. In politics it’s more important to be respected than to be liked. If Kenny loses credibility, his approval ratings will follow Lenihan’s fate.

The Taoiseach has repeatedly reassured us about the nation’s indebtedness. He claims we will repay our debts in full and on time. Michael Noonan rejects any need for a second bailout. Alarmingly, they read from Lenihan’s former briefing notes. Leaving aside the contradiction with pre-election promises, these stances are irrational. Even if advocates of default are wrong or publicly irresponsible, the case for adjusting the bailout is indisputable. Cogent arguments have been made about the scope for burden sharing with bank bond holders, which are not part of the state guarantee. This covers the €16bn to €20bn of senior bonds that are not guaranteed. These can be discounted in the same manner as subordinate investors. Additional amendments to the bailout are reduction of interest rates to that applying to other eurozone states and on a par with the cost of finance from the IMF. EU institutions of the Commission and Parliament accept the justice of this case. The release of short-term finance to banks perpetuates liquidity problems by virtue of fortnightly dependency on funds. It is in everyone’s interest to provide finance on a stable bi-annual basis. These adjustments should be publicly sought by our government, rather than glib meaningless mantras. If soothing ministerial rhetoric was to calm markets, it hasn’t and won’t work, with 12% bond yields.

Kenny’s appearance on the Late Late Show was an ideal opportunity to massage public expectations about imminent austerity. Hardened politicos can forgive electioneering opportunism, based on obscuring grim unpalatable fiscal facts. Pragmatism to form a coalition with cop out compromises in the Programme for Government can be excused to cement bed fellows. Now we must address reality. The Government deficit this year at best will be 10% of GDP. Simple maths: €170bn @10% = €17bn. The Government promises to reduce this to €5bn (3%) by 2014, while debt servicing costs will rise. Harsh budgetary adjustments of more than €10bn are required to meet their own targets, given revised downward growth forecasts.

What was Enda’s core message? A big “bualadh bos” to all for our response to Queen Elizabeth and Barack Obama. It’s not clear how or when he proposes to articulate a leadership agenda to procure economic recovery. His goal is to be a cheer leader for hope, positivity, change and belief. These sentiments didn’t impact on the April retail CSO statistics. For the 39th consecutive month, values and volumes of sales have fallen. Laudable aspirations ring out hollow at the check out counter. Fixing the economy won’t accrue from soft option politics and marshmallow leadership.

Retailers have borne the brunt of business closures and rationalisation. 40,000 jobs have been lost on the high street. 100,000 employees have departed construction sites. The hospitality sector has shed another 40,000 workers. Representative associations of these sectors have been most vocal. Construction Industry Federation, Retail Excellence Ireland, Restaurant Association of Ireland and Convenience Store & Newsagents’ Associations have all been singing off the same hymn sheet.

What’s their common message? Joint Labour Committees’ agreements don’t protect jobs. They undermine survival prospects through their rigidity, inflexibility and excess costs. These markets have been turned upside down by reduced revenue. They must correspondingly reduce their cost base to provide extra value. They can’t charge more for a sandwich or soap powder on a Sunday, even though staff costs are higher at the weekends.

Biggest myth in our current economic debate? Any measure that further reduces spending power will destroy the domestic economy. Pushed to its logical conclusion this means paralysis of budgetary or labour market reform. Public expenditure retrenchment of the late 1980s proved that cost competitiveness and investment only recovered when this resistance to change was confronted. Kenny and Gilmore want to be good cops. Richard Bruton and Leo Varadker are depicted as bete noire heartless right wingers — who are insensitive to the vulnerable and low paid. Advocates of debt restructuring are derided as anti-national doomsayers, undermining our international credibility. This false narrative defies economic gravity. They are always ultimately vindicated. The first 100 days has epitomised approaches of appeasement. Leaders supporting resistance to change are sowing seeds of their own destruction.

Former Senator Eoghan Harris makes regular sagacious references to “good authority”. This can be explained in the context of parental tough love — short-term pain for long-term gain. There is little evidence of this philosophy in Merrion Square. Failure to tackle vested interests and genuflection to social partnership were hall marks of Bertie Ahern’s leadership from 2005 onwards. Cosy consensus garnered short term electoral success, at the price of economic destruction. Further fractious parliamentary party meetings can be anticipated in the years ahead. It’s time for Enda Kenny to shift from being a people pleaser to powerful politician.