Paddy Does Not Need To Know: The Anglo Trial and The Single Transferable Scapegoat

Neary

Not sure what to make of the fact that the Anglo trial has ended with the accused walking free, and the judge concluding, as described elegantly by the legal affairs correspondent of the Irish Times, that this was a case of ‘ one arm of the State prosecuting individuals for doing something that another arm of the State had encouraged them to do’.

I think it’s partly a good thing, that as Rónán put it, the Republic was denied the catharsis sought by its political class.

At the same time, the focus of attention has now turned back upon the figure of the former regulator, Patrick Neary, and his faulty powers of recollection. According to an analysis by Tom Lyons in today’s Irish Times, Neary, during the course of the trial, said  ‘“I don’t recall” 30 times, “I don’t know” 23 times, “I can’t recall” 12 times, “I can’t/don’t/cannot remember” 12 times, “That’s a complete blank to me” once, and “I’ve absolutely no recollection” four times.’ Paddy did not know very much.

This gives weight to one of the planks of received wisdom in circulation since details of the banking crisis were made public: the regulator was asleep at the wheel. With the Anglo bankers now largely exonerated, it is now the Central Bank and the Financial Regulator, not the spivs in suits, who are chiefly to blame. Spivs in suits will do what they will; let’s go after the faceless bureaucrats! Piquancy is added by the fact that Neary is still in receipt of a pension that is eight times the minimum wage for those in paid employment.

So, whilst the show trial may not have produced the redeeming denouement that might quell popular discontent at the fact not a single banker has gone to jail, the focus on the regulator, and on other institutions of state, can give the dominant narrative of the crisis a different flavour. This flavour poses little disruption to ruling interests either.

We are still in the territory of ‘crony capitalism’, not capitalism as such. But the emphasis will now be on ‘crony capitalism’ generated by faceless bureaucrats in public institutions, and by the failure of the political system to exercise proper accountability. According to this new flavour, it will be regulatory shortcomings and the incompetence and corruption of elected politicians, that led to Ireland’s economic crash, not the animal spirits of bankers and speculators.

Such animal spirits must be appropriately harnessed in order for capitalism to work properly, and this is not the sort of thing you can entrust to a crowd of primary school teachers from down the country. For this to work, you need the input of experts who have cut their teeth in high finance and macroeconomics, not people susceptible to be led by mob passions. The idea that there is something wrong with capitalism is simply out of the question.

Today, the Central Bank Governor, eminent economist Patrick Honohan, urged that the Government ‘keep a tight rein on the public finances’ and leave the financial markets in no doubt about the maintenance of a ‘disciplined approach’. That is, more austerity.

One of the key factors in convincing people of the need for further austerity –or resigning them to it- is a sense that public sector institutions are in need of reform: they are incapable of functioning because the incompetents who run them have racked up too much debt and are spending too much money. They need to be run ‘responsibly’ –to use the term currently favoured in France. But to whom are they ‘responsible’? Not to the people who supposedly own them and depend on them, but rather, to the financial markets. The less said about the fact that much of the public debt was initially private debt, the better.

So, we find ourselves in a situation where the show trial and the fallout from it may, in fact, serve to bolster neoliberalism in Ireland, not undermine it. Experts, not public sector fatcats and soft touches, are what is needed. The last thing needed, from the point of view of the people running the country, is democratic accountability. True democratic accountability would entail disputing the matter of who ought to be paying off Ireland’s debts. But from the point of view of those running the country, there can be no dispute.

Piketty

If you get your news mostly from the Irish Independent, the newspaper controlled by Denis O’Brien, it may have escaped your attention altogether that there is quite a lively debate about capitalism as a system going on at the moment. It concerns a book by Thomas Piketty, Capital In The 21st Century, which is the top seller on Amazon.

What the book shows is that, as Nobel Economics Laureate Robert M Solow puts it, ‘the rich-get-richer process is a property of the (capitalist) system.’ Absent any kind of political programme to address what Piketty identifies as capitalism’s inbuilt dynamic towards inequality, Piketty demonstrates, according to Paul Mason, that all ‘that social democracy and liberalism can produce, with their current policies, is the oligarch’s yacht co-existing with the food bank for ever’.

Moreover, Mason says, and this is particularly relevant to the matter of Ireland’s financial and economic crisis, ‘If the underlying cause of the 2008 bank catastrophe was falling incomes alongside rising financial wealth then, says Piketty, these were no accident: no product of lax regulation or simple greed. The crisis is the product of the system working normally, and we should expect more.’

The crisis is the product of the system working normally. The shift in focus onto the head of Patrick Neary, or whoever the demonic figure of the day might be, is part of the system working normally too: our interpretation of the world is shaped by institutions owned and controlled by the wealthy. Whilst in other countries there is a surprising amount of debate about capitalism right now –even though the long term effects of such a debate, if any, are far from clear- there appears little room in Ireland for contemplation of capitalism as a system as austerity grinds onward. It is certainly not the sort of thing that falls into the purview of priestly castes of economists who prescribe fiscal consolidation and competitiveness as the cure for all ills. Paddy does not need to know. The ideas of the ruling class are in every epoch the ruling ideas, after all.

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