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Full banking inquiry a potential minefield could politicians rise above takling sides?

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World of Politics with Harry McGee – harrymcgee@gmail.com

That was a sensational scoop in the Irish Independent on Monday. Newspapers love nothing better than unearthing secrets and all the better when it is a tape, especially one that is candid and self-incriminatory.

Viewed through the prism of today, there is little in the conversation between the two senior executives from Anglo Irish Bank that is surprising. That is knowing what we know now.

But it is clear that those within the failed Irish bank knew then what we only know now.

I heard people getting outraged on Joe Duffy’s show on Tuesday about the fact that the two fellows were cracking jokes. I actually have no issues with that. It was a private conversation between two colleagues. If you listen carefully to the tone and tenet of the conversation they both realised that the company was in the soup. It was a bit inappropriate, it was a bit of gallows humour. And if you excuse my contradiction of the previous sentence as I mix my metaphors, it wasn’t really a hanging offence. Ok, the laddish quote to the ‘Drummer’ (then chief executive David Drumm) and pulling a figure out of his ass was inappropriate. But it wasn’t that big of a deal.

What was really striking to me was that both knew that the game was up. In the last sentence of the transcript (which I urge you to read in full, it’s on the independent.ie site and also on the irishtimes.com site) there is an admission that the bank is a goner and can’t survive. One of the two is prescient when he says the only solution is for the bank to be broken up or be nationalised. It was as stark as that.

It’s clear from the gist of the conversation that both knew deep down that all of the other Irish banks were so reputationally damaged and  weakened (Bank of Ireland might be big here but was a ‘minnow’ in the bigger world) that they were in no position to buy Anglo and, indeed, were in trouble themselves.

What was also intriguing is that they also knew at the time that €7 billion was not enough. They said if the Central Bank was willing to cough up that amount of money it would have “skin in the game” and would cough up more. In other words, the Central Bank would have no choice but to invest much more (and we know the eventual figure came to a staggering €40 billion) in order to protect its initial investment of €7 billion.

The transcript, with its mixture of macho bravado and uncertainty, reads like the script of a David Mamet play (he’s the guy who wrote the seminal play and film Glengarry Glen Ross). There’s even a hilarious parody of the hapless financial regulator Patrick Neary. One of the two mimics Neary’s nervous search for reassurance as he was told that the Central Bank would have to stump up €7bn. Neary championed the now discredited light touch or principle-led regulation of the banks and was unaware that a crisis was about to befall Irish banks until caught in the headlights of the juggernaut bearing down on him.

There are two major political issues that arise from this disclosure. The first is how much of this knowledge was shared with the Government on the famous night of the guarantee in September 2008. All accounts of that fateful meeting seem to suggest that the problem was presented by the banks – including Anglo – as a liquidity problem but one that could fell all the banks if it was not sorted.

It’s clear that Anglo and others were economical with the verité as they obviously knew much more than they pretended and knew that the problems were graver and more systemic and – most probably – unrecoverable.

For more, read this week’s Connacht Tribune.

Connacht Tribune

Best laid plans and programmes can fall foul of political reality

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Debate snub...Sinn Féin leader Mary Lou McDonald.

World of Politics with Harry McGee

If architects’ plans were like the Programme of Government,

  1. the country would be full of unfinished buildings
  2. that would look nothing like the plans.

Prospective governments spend weeks – and sleepless nights – working out the programme that will be the blueprint for their term of office.

Some even produce a glossy self-congratulatory report each year, showing how many of its targets have been achieved.

Two things need to be said about that:

  1. They are subjective.
  2. Nobody outside the bubble pays any attention to them.

Some set out ambitious targets for the first 100 days of government. That idea has been around since the 1930s and is designed to show a signal of intent, that the new Government is going to put its money where its mouth is.

More often than not the new regime learns to its cost that it has bitten off more than it can chew. Achieving something in the world of politics within 100 days is like reading Tolstoy’s War and Peace during a lunch break.

  1. Not exactly impossible
  2. But not exactly possible

And do governments learn from these mistakes? Do they realise that it is a bit of a ridiculous concept?

  1. No
  2. No

There is a political problem here. You might achieve the big things in politics, you might get a wobbly economy back on to an even keel, you might create a historic record for employment, you might push through the six referendums you promised to liberalise society.

But it’s a bit like the guy who earns a reputation for not buying a round. No matter if he has devoted his life to the service of others, and has sacrificed everything for the personal good.

For more, read this week’s Connacht Tribune.

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Connacht Tribune

Politics and law have been entwined through the ages

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Seamus Woulfe...at the centre of latest storm.

World of Politics with Harry McGee – harrymcgee@gmail.com

I remember when I was a kid there was an Irish rugby tour to apartheid South Africa which caused a huge furore, including a (if I remember correctly) a shouty row on The Late Late Show. One of the arguments used by those favouring the tour was: “Sports and politics should not mix.”

It went down well as a sound bite but was a nonsense; the reality is that politics mixes with everything, including sports. Nothing occurs in a vacuum.

Politicians make decisions over how sport is funded, how it is governed and regulated (look at the recent row over John Delaney’s tenure), and sometimes when it can be played.

All sports organisations have their own internal politics which can be more vicious than the stuff that goes on in Leinster House. And political parties have long ago discovered the benefits of putting a high profile former sportsperson up as a candidate.

Which brings us onto the bigger issue: the separation of powers in the State. Our Constitution draws out a relationship between the three arms of State – the Executive (government), Judiciary and Parliament (the Oireachtas). The impression that has been handed down to us is they are three goldfish in different bowls, all swimming, but in different waters.

It just doesn’t work out like that in real life. For one, for most of the history of the State, parliament has essentially been a chattel of government, with no real separate powers of its own.

In recent years, with less stable majorities for government than in the past, that relationship has changed – but parliament is still very much subservient to central Government.

It’s not just lip service when it comes to relationships with the legal establishment. There is an effort to assert that they operate in separate spheres but real life often intrudes – it’s more or less impossible to maintain the divide, unless you do it artificially.

For one, it is politicians who appoint judges, not other judges. Now, of course, judges have a say in it. There is the Judicial Appointments Advisory Board (JAAB) which assesses the merits of lawyers who are not yet judges.

For more, read this week’s Connacht Tribune.

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The Connacht Tribune Live app is the home of everything that is happening in Galway City and county. It’s completely FREE and features all the latest news, sport and information on what’s on in your area. Click HERE to download it for iPhone and iPad from Apple’s App Store, or HERE to get the Android Version from Google Play.

 

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Connacht Tribune

Biden brings normality back to world’s most powerful office

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US President-elect Joe Biden celebrates his victory with his wife Jill and his Vice-President-elect Kamala Harris.

World of Politics with Harry McGee – harrymcgee@gmail.com

I did not want to make the same mistake I made four years ago. Then I stayed up until about 1.30am and it looked like it was going okay for Hillary Clinton in Florida. So I said to myself, that big buffoon is done for. When I woke up the next morning Donald Trump was the President of the United States. He had somehow managed to win Florida and dismantled the Blue Wall of Democrat States in the Mid-West by taking Pennsylvania, Michigan, Ohio and Wisconsin.

This time I stayed up until 4.30 in the morning. And that was a mistake too. For the picture was as unclear then as it was 12 hours later.

It was too close to call but already commentators were talking of a red mirage; most on-the-day voters plumped for Trump but early voters – whose votes were counted last – had steered very sharply towards Joe Biden.

It was historic. It’s really hard to knock out an incumbent president seeking a second term. It had been done only eight times before that in two and a half centuries.

Was it his inept handling of Covid-19? Had people grown sick of his vanity and his self-serving boasts? Did this natural disruption just cause too much turmoil and uncertainty in people’s lives? Did his partisan views, that red-mist madness, repel more than it attracted?

Well, the evidence is in the poll. The answer to all those questions is yes. To me, the outcome was clear. Biden won the popular votes. He also won the electoral colleges.

The majority was small and reflects a very divided society. Trump is the champion of rural, less educated, blue collar white, conservative, Hispanic and white America. Biden is popular among the middle classes, the urbanites, the better educated, and black voters.

For more, read this week’s Connacht Tribune.

Get the Connacht Tribune Live app

The Connacht Tribune Live app is the home of everything that is happening in Galway City and county. It’s completely FREE and features all the latest news, sport and information on what’s on in your area. Click HERE to download it for iPhone and iPad from Apple’s App Store, or HERE to get the Android Version from Google Play.

 

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