Johnny Fallon

Irish Political Commentator

Banking, housing and why we never learn…

The problem with politics is that its adversarial nature rarely allows us an opportunity to take stock and actually learn something. As a result we tend to repeat the same mistakes over and over again. The announcement of the banking Inquiry is a good thing. It will be therapeutic. It will allow politicians and officials to come before the public and explain in person. It will also provide those of us who write on such matters with lots of column inches. I’m not expecting it to do much more though.

The Inquiry comes at the same time as we return to efforts to stimulate the housing market. The irony should not be lost on anyone.

In politics everything is utterly and completely your opponents fault. They got it wrong. They did this for two reasons, they were corrupt or they were utter imbeciles. This is the simplification of debate that allows you to win votes. It allows you to then tell people all they need to do is get rid of those fools and everything is ok. The real problems begin within a party when they start to believe their own hype. They convince themselves that the only thing they need to do in order to get things right, is just not be the other guy. They believe they can never make the same errors because they are not so ‘blind’ and they are not ‘corrupt’. The inevitable result is that they make the same mistakes again. Government after government, party after party all equally guilty.

There is nobody who can deny that the Fianna Fail led administrations got things horribly wrong. The punishment dished out at the ballot box was deserved. Knowing what went wrong does not always stop it happening again though. Knowing why they got it wrong does.

FF/PDs ran a government from 1997 to 2002 that didn’t do an altogether bad job. In fact it could be argued that this was quite a successful government and the electorate in 2002 agreed. The problem was that things were changing just after that election. FF lacked the backbone to stick to cut backs and breaking of some promises. A kicking in the 2004 local elections turned out to be a disaster for the country. Between 2004 and 2007 spending spiralled out of control.

Now, why did this happen? Let’s start with the promises. FF would do anything to get elected, promises were easily made. The current government showed they are no different. Now FF and SF in opposition both promise new easier paths that neither will be able to implement in government.

Then there were the banks. FF got pretty much everything wrong when it came to banks and regulation. Why did this happen? The popular line is that they were lining their own pockets, or corrupt. The truth was FF was too busy listening to banks. They were just too close to those at the top. They trusted them. It didn’t have to be corrupt or incompetent, all it needed was Ministers who thought these guys were the experts and we need to do what they say. Time and time again FF listened and failed to ask the vital questions on behalf of the people. FF believed that the people just didn’t understand this high finance world and that we needed to work with the banks and the market.

This government believes it has a new approach to banks. Why? Because this government is not FF, they don’t have the Galway tent, so it’s all going to be grand. They then sit down with the banks and listen to their proposals on Mortgage Arrears and do all they can to facilitate them. The banks are the experts and vital to the economy we can’t upset the business model and have to understand the market difficulties in lending.

FF fuelled a housing boom. At the time it was happening FF was utterly convinced that it was attempting to do something good. The famous line from the early part of the last decade was that a ‘garda or a nurse’ would struggle to afford a house in Dublin. Something had to be done. These people had to be assisted. We had a historical problem and were playing catch up. Imagine my surprise to see a government supporter use this exact Garda/Nurse line on twitter this morning. The cuts have hit wages and prices are rising, we need to help people buy a home. Of course it’s different this time. It’s different because this government is not FF, it doesn’t have a Galway tent so it’s all grand.

FF increased spending at the very time they needed to scale back. Opposition parties at the time wanted to spend even more. The political parties all partied, make no mistake. FF cannot escape the blame though, it was their job, and they mucked it up. The popular line is they did this just because they were corrupt figures who never cared about the people. The problem is nobody in FF thought like that. If villains were guys who sneered up their sleeve like a cartoon character then we would spot them easily. It’s never so simple. FF thought that this spending was required. Schools had to be built, Hospitals had to be funded, and Infrastructure had to be put in place. It was all good stuff, all things that people wanted and needed. There were tax breaks given right left and centre. These too were seen as playing a role; they could only be scaled back slowly in case they delivered a ‘shock’ to the economy. That worked out well didn’t it?

FF became obsessed with the idea that things could be managed. Nobody was going to shout stop in a construction boom. If they did they would be blamed for putting thousands of construction workers out of a job and losing millions in tax revenue. They had to do it slowly they had to ‘manage’ it. The current government believes it can manage things too, it can stimulate and deter at will so long as it does it gently. It will all work out fine because we are not the other guys.

Fianna Fail is no less to blame for the crisis just because they didn’t mean it to happen. It was not some devious plan. Fianna Fail deserve to take the rap but for the right reasons. They failed to see the signs, ask the questions and to learn.

This government and indeed the opposition are determined to keep this cycle going. The issues are always political. They are always the fault of the other guy. Just believing yourself to be a good guy, is not enough to avoid disaster or end up heaping misery on the lives of thousands of people.

There were good guys in the last government and in many previous governments. They had a host of experts, statistics and reports to back up decisions they took. They argued their corner in the firm belief that they were the ones saving the people from some kind of a disaster and instead led them straight into the mouth of the very thing they wanted to avoid.

Politics should be about learning lessons. If parties could stop hating each other for five minutes and look at the situation they could see how they are just as easily manipulated and swung until they do the very same thing. They won’t though. The only thing necessary to triumph in politics is to not be the other guy.

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