Monthly Archives: April 2010

Our new kick-ass financial regulator

The arrival of Matthew Elderfield a.k.a. The Financial Regulator a.k.a. The Regulator a.k.a. The Sheriff of Dodge City has been universally heralded by the media and political establishment as the second coming of Christ. Well, the Christ of ledgers, calculators and informal speeches at the Financial Services Ireland Conference anyway.

At a time when public sector workers and government are almost uniformly pilloried in the press, this hyperbolic enthusiasm for a single high profile public servant appears all the more unusual.

The regulator is presented as the singular solution to the crisis that resulted from Ireland’s unique version of capitalism. The “straight-talking” “no-nonsense” gunslinger is portrayed by the media much as your typical Hollywood Western hero might be written into a script. The “polite, occasionally diplomatic, but mostly just blunt” former Chief Executive of the Bermuda Monetary Authority “rode in to clean up the town,” firstly “disarming the critics with his openness” before “shooting straight from the hip.”

The use of the metaphor is pervasive. While some journalists don’t directly refer to him as the sheriff, they apply common idioms that resonate similarly. We are told Elderfield “sticks to his guns” and “takes-no-prisoners.” The enemies he has been tasked with “eliminating our beloved banking bad boys,” the country’s formerly “untouchable” financial gangsters.

Unlike “his hapless predecessor” he has no interest in winning friends: “No doubt he will not now be wined and dined by the Irish Bankers Federation.” Displaying only his keenness to break-up the “cosy relationship” previously enjoyed between regulators and bankers.

Other journalists have taken to using strikingly religious overtones: Elderfield is a “ray of hope” who’s enemies invariably “bow” to him. One notable headline read: “The Gospel according to Matthew.” The irony of which wouldn’t be lost on Nobel prize winning economist Paul Krugman who described the driving ideology behind financial deregulation since the Reagan era as “free-market fundamentalism.”

The man himself is described in much the same way successful businessmen like Michael O’Leary and Sean Quinn are portrayed in the kind of articles found in Sunday newspapers – the ones which pay tribute to their tumultuous careers. Quinn for instance is portrayed as a “man from humble beginnings who has created a multi-billion-euro empire,” “a doughty opponent of establishment monopolies.” In 2007 Quinn invested €570 million in Anglo Irish Bank, the “anti-establishment” bank. Quinn, we are told, made “business buzz” (The Quinn family currently “owe Anglo Irish Bank €2.8 billion”).

Similarly, Elderfield is painted as an unassuming character, a “slightly gangly, ever-so-polite Englishman called Matthew,” with a “toothy smile and mild manner.” He is described as wearing a “well- cut grey suit, light blue shirt and quiet striped tie.” If a journalist wanted to stress the point they might say he is “tall, fit, tidy, polite and perfectly groomed.” Yet beneath this reserved exterior lies “a man who means business,” he is not afraid to “flex his muscles” in public, but prefers to “talk-quietly-and-carry-a-big-stick.”

Highlighting this fanfare is not intended to undermine the importance of financial regulation, after all there is little point having laws if there is no responsible person around to enforce them. It is simply an attempt to understand why the media can be so easily worked into a fever about certain things and, in this case, certain people.

One of the principle aims of regulation, aside from oversight, enforcement and prosecution, is to maintain confidence in the financial system. What better way for a government to overturn a crisis of legitimacy, in itself and the financial system that bolsters it’s power, than by restoring public confidence in that system?

The media too could be seen to be taking advantage of a prime opportunity to shirk the record of the last decade, where it failed to take the worlds of politics, banking and business to task over their intrinsic “irregularities“. A history that is peppered with embarrassing moments of deference to power, such as the Irish Independent’s hard hitting interview with the now disgraced Sean Fitzpatrick, where the question was asked “If you had a spare million?” to which he answered quite proudly “I’d do something for the homeless; provide day-time facilities.”

With that in mind, the idolisation of “Sheriff Elderfield” begins to make sense. The appointment and support of Elderfield, does much more than “show the world that the wild west of European finance has been tamed and is now a safe place to invest and do business,” it effectively provides a new facade behind which the business of politics can go on unchanged.

The only wing of the establishment to make official grumblings on the occasion of his appointment was the financial sector, who are, understandably, concerned about the implications of someone potentially applying the rule of law as it is written.

More recently ruminations from government have surfaced, albeit from rather more forthright party members. Fianna Fáil TD for Cork East Ned O’Keeffe addressed the Dáil in the last weeks saying: “There is nothing worse than overregulation. It brings further mischief, contempt and blackguardism because people will find their way around it. We have seen that occurring.” A blunt reminder of the “tacit discouragement” of regulatory “determination and tenacity” by senior politicians in the preceding decade.

Journalist and broadcaster Matt Cooper responded to this inversion, seemingly without irony: “He seems to think so little of those who run Irish banks, and by extension the Irish mentality, that he believes they would concentrate on beating, bending or breaking the rules rather than doing the right things.” A strange statement from a journalist who has not been shy to voice condemnation of Irish banking, referring to “arrogance“, “recklessness” and “criminality” as their principle economic contributions.

On the other hand Noam Chomsky has described the history of financial regulation, in broadly similar tones to Krugman, as a continual effort by business to undermine the regulatory apparatus, such that it is inevitably overtaken by the systems it is designed to regulate:

“The deregulation mania of the last 30 years, based on fundamentally religious concepts about efficient markets is gone… So there will be reconstruction of some regulatory apparatus, but the history of this is pretty clear and understandable. Regulatory systems tend to be taken over by the industries they regulate. It’s natural, they have concentrated power, concentrated capital and enormous political influence.” [Noam Chomsky in interview with Paul Jay, The Real News Network]

This “deregulation mania” was obviously not an American phenomenon. As Krugman writes, “the most striking similarity between Ireland and America was “regulatory imprudence”” driven by ideology. An ideology that led the formerly popular figure Sean Fitzpatrick to pronounce, “There are those who appear to want to establish Ireland as the perfect model in corporate policing and regulation . . . But why? What has been done here over the past decade that demands such a reaction?” at none other than the Irish Times Property Advertising Awards 2005.

We are again beginning to see hints of this again – the regulator’s move to put Quinn Insurance into administration was followed by large scale public and private lobbying of government ministers, the mobilisation of thousands of workers to protest and what amounted to a coordinated PR barrage against the regulator in the press. The obvious question arises: If the country was not embroiled in the current economic predicament and if public awareness did not extend to the complexities of insurance solvency ratios would these protests have been met differently by both press and government?

Enda Kenny the leader of the opposition has also recently cautioned “against an over-regulation of the property sector,” in response comments made NAMA’s chief executive Brendan McDonagh, who told an Oireachtas committee the agency would go after developers “tooth and nail” for debts.

Further afield the warning signs are growing, Paul Krugman commented this week: “after taking a big hit in the immediate aftermath of the crisis, financial-industry profits are soaring again. It seems all too likely that the industry will soon go back to playing the same games that got us into this mess in the first place.”

It’s quite clear then, no matter whether your Financial Regulator chews tobacco, looks good in a Stetson or walks on water, as appointed representatives they remain susceptible to the influence of higher powers.

Not until the structure of our economic and political institutions and the ideological orthodoxy that underpins them are challenged will we ensure history does not repeat itself. The media for their part have shown an unwillingness or inability in this regard.

 

[Title courtesy of Will Hanafin, ‘Thank the banks for really great villains‘, Sunday Independent, 25/04/10]

Reflected glory, aaaaaaahhh

In response to Louise Holden’s piece in today’s Irish Times, where the Times basks in the reflected glory of Morgan Kelly’s wisdom and foresight, because they happened to publish a few of his articles seconds before the bubble burst:

Dear Louise Holden,

Thanks for the interesting piece on Morgan Kelly in today’s Irish Times. However, I wanted to ask why there wasn’t much discussion of whether the media played their part in labeling Kelly as a pariah. For instance, there’s no explanation why “Morgan Kelly” returns only 2 results from the Irish Times archive Dec1999-Jun2007 and one of those is for Fingal Golf Classic.

Best wishes,

David

[I’m told by someone that due to some rare unforeseeable technical anomaly  I could be out by some 1838 entries, however, I’m 100% certain of my correctness, until such time that the factual evidence is provided, then as with all good economists (I’m not an economist) I reserve the right to revise my opinion]

The media’s annual festival of teacher hating

Posted on The Irish Times today in response to an article by Anne Marie Hourihane about the teachers’ conferences:

Atta girl, Anne-Marie – brownie points well earned there. Right on editorial message. Madam Editor will be delighted with you, rest assured. An entire class of public sector workers written off because they exercised their democratic right to express their feelings about disastrous government policy. Don’t think I’ve seen another column to equal this for sneering, ill-informed prejudice. Not a single line of it even remotely pretending to engage with the substantive issues that were debated at length at the teachers conferences. Not a word about what Don Ryan actually said during his address to the TUI. Anyone reading coverage of these events during the last week could be forgiven for thinking journalists typically have the concentration span of a gnat – and half the intelligence. I’ll give you a mark for originality though: contriving to make a victim out of Mary Coughlan is a great joke. And fundamentally sexist too: Coughlan was treated to a dose of the same, fully justified anger as is felt by men and women up and down the country and which every government minister is experiencing wherever they dare to show their faces.  
 
Public sector workers no longer need to put up with being caricatured and insulted by journalists in order to find news, thank God. There are plenty of alternative sources of news to choose from. So Anne Marie, want to know how YOU look to us? Here’s a good analysis by Dr Gavin Titley of some of the Irish Times coverage of the teachers’ conferences. http://www.mediabite.org/article_-Keeping-it-Real–by-Dr-Gavan-Titley_823780188.html

‘Keeping it Real’ by Gavan Titley

The Media and the Teaching Unions

Following the introduction of his first ‘austerity’ budget in 2009, Irish Minister for Finance, Brian Lenihan incensed many Irish people by boasting while traveling abroad that there ‘would have been riots’ had similar cuts to pay, pensions and welfare been imposed in other countries. The ruling party, Fianna Fail [Soldiers of Destiny] who caused one of the worst economic crises of any western ‘democracy’ have had to appease their neo-conservative paymasters and controllers. The International Monetary Fund and the European Central Bank were chief targets among the audience the Minister would have had in mind while making his remarks and all the signs since then are that they were suitably impressed. While billions are being transferred to failed banks and in compensation for failed property developers who have been funders of Fianna Fail, another catastrophic budget has since been inflicted on Irish people while more are promised.  Our only consolation, evidently, is that we are no longer to be regarded as a member of the disgraced group of EU countries known as the PIIGS (Portugal, Italy, Ireland, Greece and Spain made the most spectacular messes of their economies). Ireland’s teachers, much less their unions, would have been right down at the bottom of the list of publics Mr Lenihan was trying to impress. If they were on it at all.

The Easter break is traditionally the time when the Irish teaching unions hold their annual conferences and the 2010 events were held this year in the context of a ‘pay deal’ that had been ‘negotiated’ between union leaders and the Irish Labour Relations Court (on behalf of the government) and for which approval was being sought from the union membership. As one trade unionist put it, if the deal had gone through it would have set employment rights back a hundred years. Two of the three teaching unions rejected the deal unanimously, while the third agreed to it by a majority of just 4 votes.

Continue reading ‘Keeping it Real’ by Gavan Titley

Shell and The Fisherman

Article originally published on California-based Znet – Associated Interview in Village Magazine

I defy anyone to go to Erris, County Mayo and spend time with the local people there without finding that the place eventually gets into your soul. Though it seems at first to be a strange, even bleak landscape to those unfamiliar with it, the extensive peatland with all the colour of its extraordinary plant life, the surrounding mountains and the superb Atlantic coastline all conspire to draw you in.   Driving along the road through the small town of Bangor on the Belmullet road, the atmosphere is palpable.   Here a community of people had been attending to what is still in some respects a remote and unique way of life in undisturbed peace and quiet until the arrival in their midst of the giant oil and gas conglomerate, Royal Dutch Shell. Shell were invited in by the Irish government with all the decorum of a gangster’s moll (if the comparison is not offensive to gangster’s molls) for the purpose of building a gas refinery and exporting gas reserves that hitherto had been the property of the Irish people until the rights to it were sold in secret by a government politician, Ray Burke, who was subsequently jailed on unrelated corruption charges.

At first the community were unsure quite what to make of it all but they welcomed it cautiously as seeming to be something that would bring prosperity to the area. As the project advanced, however, they began to wake up to some alarming realities and during the last ten years have gone from that initial attitude of welcome to one of vehement and hugely distressed opposition to it.

Among the many people with painful experiences of resisting the project is Mayo fisherman, Pat “The Chief” O’ Donnell. The Chief has been a vocal objector to the present configuration of the benighted Corrib Gas project which is in the North West region of the Republic of Ireland. In 2008 he was instrumental in preventing Shell, the main partner in the consortium which owns the Corrib Gas field, from laying its disputed pipeline in Broadhaven Bay. Below is an interview in which he describes how he was held at gun-point and his fishing boat scuttled on the night of 12th June 2009.

As I write this in early April 2010, Pat O’ Donnell is in Castlerea prison in County Roscommon, convicted of a public order offence which Gardai [police] say he committed during a public protest. The circumstances of his arrest and conviction are strongly contested by his many friends and family who say that O’ Donnell has been subject to vindictive treatment because of his effective opposition to what Shell are doing in County Mayo. The claims made in his defence have also to be considered against the fact that since Pat O’ Donnell’s fishing boat was scuttled there has been no proper investigation into the events of that night.

Continue reading Shell and The Fisherman

Cabaret or Punch and Judy?

Went along to the Leviathan gig the other night to see what the fuss was about. The mini adventure (c) was nearly scuppered before it started when I was accosted by a surly ticket attendant attempting to releave me of €17.50. Following the mugging we were greeted by musical comedy being enjoyed by the middle class.
The debate itself was of the old school left/right variety. McWilliams opened the debate with tried and tested comical jibes against Kieran Allen’s political inclinations, setting the tone for the debate. But this is par for the course of course. Funny how a Fianna Fáil backbencher can sit on stage unencumbered by ideological stigmata, but a marxist / socialist has to be outed and marked for ridicule.
In a debate on economic recovery, the fact a ‘dissident’ (just like the Greens are dissidents) Fianna Fáiler (though you wouldn’t know it looking at his website http://www.johnmcguinness.com/), whose party presided over the destruction of the Irish economy, the burdening of future generations with speculators’ debt, the support of two criminal leaders and on top of all that, decades of collusion with a church that conspired to cover up/facilitate child abuse, left almost entirely unscathed is about all you need to know to predict how the night played out.
There was little or no discussion of the economic implications of further wages cuts and redundancies in the public sector, no discussion of the knock-on effects in terms or mortgage defaults etc. The debate centred entirely on the assumption that the public sector is overpaid and inefficient (because it is over staffed and overpaid).
One former teacher suggested that the debate had failed because it sought to pit public against private sector, instead of dealing with the real issue, low paid versus excessively paid. This gained a quiet rumbling of support, but this was quickly drowned out by further vague condemnation of ‘bench marking’ and wild accusations of unions ‘running the country’ to ruin.
The audience rounded on the union reps for their lack of ambition in invigorating employment. The consensus being that government money is being diverted from employment programmes to public sector pensions. The idea that stimulus was being binned for bailout was considered a diversion.

In support of this, McWilliams, the impartial host, mocked anyone that drew attention to the fundamental culprits of the crisis – the bankers, developers and politicians.

This post is particularly useless for anyone that actually wants to know what was said at the debate, but I zoned out after about 20 mins, so this tweet summary will have to do:

Unions hounded, only passing ref 2 econ implicatins of public redundancies. Allen didnt get a look in. Union reps spoke vacuously 1:52 AM Apr 9th via API

John McGuinness played the Green party card, he’ll be the change. Debate shouted down by McWilliams prodigy. Delevan told a joke 1:54 AM Apr 9th via API

Sarah Carey thinks everyone is to blame except the media

On last Friday’s Late Late show  [first item on the programme] a panel of journalists including Matt Cooper, Kevin Myers, Sarah Carey and Ger Colleran lamented the impotence of the opposition in the face of Fianna Fail’s economic and political mismanagement, rightly deploring the egregious carry on that has caused so much grief for so many people.  That was all fine and dandy, being a commentary that was after the fact but no less true for all that.  The one place they could not, or would not go in their deliberations was into any discussion about the role that the media played in helping to bring the crisis about. 

‘We have no excuse, everyone knew’

In this morning’s Irish Times Sarah Carey begins her colum today with these astounding words:

No one can say they weren’t told how bad our economic policy and loose regulation were for our future

In other words, the media were doing a brilliant job throughout and had exposed at every turn the corruption, the TDs and Ministers who were securing loans from Fingleton and Anglo on the nod, the failures of the financial regulator and all the rest of it.  That this stuff might all have been an open secret among the political/media/business in-crowd would not surprise many people at this stage.  But did the rest of us have any inkling that this was happening?  The vast majority hadn’t a clue.   The real question is, did the media investigate or report it thoroughly while it was ongoing?   Did they fuck! 

David Manning of MediaBite (@Media_Bite on twitter) wrote a much praised piece for Village magazine last year about the role of the Irish media in the property bubble which is worth the read if you haven’t seen it already.  It delineates the overwhelmingly supportive consensus that existed among media commentators and editorial writers about the boom times and how so many were adamant that any negative media commentary would rock the boat and be damaging for the economy. 

Couldn’t refrain from posting this comment under Sarah Carey’s article this morning:

Yet another journalist who sees fault in everyone and everything except the media itself. Sarah Carey exonerates the dismal performance of the media in helping to create this situation by the gross generalisation that ‘everyone knew’. Maybe Irish Times readers who happened to read Morgan Kelly a few times had a fair idea but they are a small, affluent minority of the whole population. Aside from about half a dozen voices – routinely shouted down by their own colleagues – the media were a total disgrace. The Irish Times itself, with its annual Property Awards, its lucrative property section and strong Progressive Democrat editorial leanings was out in front of the pack, calling for ever more ‘liberalisation’ and all sorts of other now demonstrably failed policies. The media were cheerleading and promoting the madness all the way – either through positive coverage of the lunatic carry on by the elites or – worse – by a wilful omission to enquire and report much further into what was happening than they did.  
 
I’m go[i]ng to copy this post before submitting it because the last time I posted critically under a Sarah Carey column, my comment was censored.