FORMER Taoiseach John Bruton keeps grabbing the headlines. Two weeks ago, on this page, I deplored his intervention into the abortion debate, one that could have caused unnecessary difficulty for Enda Kenny, the first Fine Gael leader to follow Bruton as Taoiseach.
Now, although it is notable that he is associating with the conservative Catholic pressure group, the Iona Institute, the former Minister for Finance (of 30 years ago) has turned his hand to matters economic again.
We have to hope that his latest intervention has as little impact as his last. Bruton is a shill for a particular type of big business: the big banks and mobile capital of those who operate from the International Financial Services Centre in Dublin.
He is paid to be the spokesman for IFSC Ireland in public and lobbyist in private, rumoured to be on a six-figure annual payment for his part-time troubles on behalf of this coalition of private sector interests. (Don’t be fooled by the name: it is not a State representative body although it works hand in glove with State agencies such as the IDA).
So remember that it might be somewhat difficult for him not to confuse what is in the national interest as being in the interests of IFSC members, and vice versa, when it is not. The IFSC raises mixed emotions among those who care to consider it. It has contributed billions in tax revenues over the last 25 years and created thousands of well-paid jobs. The belief is that, for the sake of the economy, we need to keep it and develop it further.
On the other hand, there have been many criticisms levelled over the years, most prominently in a major investigation by the New York Times, that the IFSC facilities tax avoidance at best but also and hosts “hot money” which may constitute the proceeds of crime or the evasion of payments of tax in other countries. The “investments” sometimes made with this money may be of dubious value too. Some of the ruinous dealings by German banks during the last decade were routed though the IFSC.
So is it a question of morality and ethics on the one hand or pragmatism on the other hand? Recently Michael Somers, the deputy chairman of AIB, and former boss of the State-owned National Treasury Management Agency, launched an astonishing attack on the monitoring of the banks at the IFSC, warning that “heavy regulation” is so upsetting to them that they are moving out of Dublin in protest. Then, days later, his friend Bruton told the European Insurance Forum conference in Dublin that “we need to put a rein on regulation. Regulation isn’t a substitute for ethics, regulation isn’t a substitute for morality, regulation isn’t a substitute for trust. It may help create all of those but will never and we can never expect it to substitute ethics, morality and trust”.
Ah yes, Mr Bruton, we have no reason to question the ethics, morality and trustworthiness of bankers, do we? These are all wonderful people who always put such concerns before profits, don’t they? How dare anyone suggest that such people need to be regulated. !Ethics, morality and trust. All present and correct in banking, eh?
The trouble, however, is that many other people believe the type of guff that Bruton and Somers are spouting. That they tend to be very rich from their business interests, or are in possession of six-figure State pensions that insulate them from the potential consequences of their opinions, if put into action, is a common link. Some see themselves as seeing “the bigger picture”, just because they have been among the biggest beneficiaries of unregulated capitalism, or of the State provided trough for those who have pushed that agenda faithfully.
The problem with Bruton is that as a former Taoiseach his position confers some credibility and authority. But his track record is not the greatest.
Bruton is one of those who championed our country’s entry to the euro, a currency which has been a disaster for everyone concerned, as all of its 1990s critics predicted it would be. Bruton’s devotion to the EU — subsequently rewarded with a lucrative stint as EU ambassador to Washington — was such that he was among those who deliberately ignored the many relevant economic criticisms as to its very unsuitability and, in turn, Ireland’s engagement with it.
I remember Bruton telling me once, prior to the introduction of the euro, how one of the most important reasons for its establishment was that it would give us permanently lower interest rates. Bruton’s concern was that too many Irish business found the cost of doing business too high because of the high interest rates they were charged by banks. The euro would solve that because it would mean cheaper money. And so it did. But that was valid only to a point: I remember pointing out to Bruton that we needed interest rates appropriate to our economy’s needs and that by joining the euro we were surrendering our ability to move them according to our need. Had the euro not been created we might not have had the type of boom created by cheap money and we most certainly would not have had the bust. Bruton still doesn’t seem to understand the euro’s faults and needs fully. He is banging on now about the need for banking union, the latest solution that has been proposed by the elite to the unresolved euro crisis. But the key to saving the euro, if that is what we want, remains full fiscal union — which is a political near impossibility — and the other requirement is the massive write-off of debts that cannot be repaid, something the EU will not countenance.
BRUTON has been an advocate too that Ireland must repay all of the money that it owes, that it cannot default on its debts. The problem with that is that the privately incurred banking debts that were recklessly and wrongly taken on by the State have become part of that sovereign debt. That was immoral but Bruton was remarkably quiet about that “pragmatism”.
In recent years too Bruton has been one of the champions of austerity, believing that the budget deficit must but cut ruthlessly and quickly. There may be a perceived economic logic to this — although the experience of the last five years shows that textbook austerity is not working as expected or desired — but it has been too easy for Bruton on a State pension of €140,000 per annum and private sector income to indulge himself in proposing pain for others that he will not endure himself.
Some people have worried recently about the appropriateness of President Michael D Higgins speaking out on economic issues, as he has in interviews and speeches. As it happens, Higgins has a mandate. He was elected as recently as late 2011. Bruton is retired from active politics — as his pension proves — but he had his chance to stand for the Presidency at the time on behalf of Fine Gael.
The word is that he declined when approached unofficially. I suspect that he would have lost had he run against Higgins and that he feared that too.
But having made that choice then he should be quiet now. If he wants to be active politically — or work as a lobbyist — then he should refuse to take his pension and, dare I say, refund the money he has received when in the employ of the IFSC.
The Last Word with Matt Cooper is broadcast on 100-102 Today FM, Monday to Friday, 4.30pm to 7pm.
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