July 23, 2008
This is the opportunity to push through reforms and market the entire programme as a necessary exercise in ‘tough love’
A crisis is a great opportunity that is far too valuable to be wasted. Some political genius must have said this — or words to that effect — at some stage. It appears like sound advice for our political top brass at the moment because, if we start with this basic proposition, we can begin to feel confident about the prospects for the country.
A crisis legitimises drastic moves. A crisis allows a leadership to move swiftly and ruthlessly. A crisis reveals where the problems lie. When our back is against the wall, initiatives can be executed on the basis that we have no alternative. This is, therefore, a rare political opportunity, and one that is not presented regularly.
A crisis should be embraced by our political leaders as a carte blanche to make concrete their vision for the economy and, by extension, the country.
The first lesson of political savvy must be to admit the crisis, tell the people it could get worse and crystallise what you are going to do about it.
However, this idea presupposes that our top politicians possess two, sometimes conflicting, attributes: vision and doubt.
Let’s deal with the vision thing first. Employing a crisis to re-engineer the economy assumes our public representatives know where they want to go and how to get there. This presumes that in all their years of fixing windows, running local elections on local issues, climbing their way to the top, making alliances and elbowing out competitors, our political leaders have also thought about what kind of country they would like to create. They have examined what is going on in the rest of the world, where best practice is evident and what we might be good at.
The second attribute is the ability to doubt, to dissent and to think past the slogans of recent years. Once politicians have the ability to doubt, they can question advice and explore new ideas. Arguably, you can’t have vision if you don’t have the capacity to doubt in the first place.
Right now, while there are many reasons, despite the bad news, to be confident about the world economy, we haven’t heard anything from Kildare Street that suggests our top brass know where to position Ireland for a global upswing. Granted, they have been fire-fighting and are probably exhausted. However, by continuing to accuse people of talking us into recession or suggesting malicious rumours have derailed the economy or, worse still, by mouthing platitudes like “Ireland’s fundamentals are strong”, our politicians are exposing themselves as headless chickens.
Quite apart from the fact that the rest of us realise all is not well and can’t have the wool pulled over our eyes economically, the idea that they can’t see a crisis as a political opportunity implies that even from the Machiavellian perspective of power, they are foundering.
The triumvirate of Brian Cowen, Brian Lenihan and Mary Coughlan don’t seem to realise how powerful their position is at the moment. This is the opportunity to push through reforms, obliterate their enemies and market the entire programme as a necessary exercise in ‘tough love’. If they were to come up with a long-term plan, we would go with them. If they decided that they needed to forge ahead with a radical agenda — based on sound economics and the national good — we’d all be relieved.
On every major issue, from taxation, government spending, immigration, relations with Europe, the US and the diaspora, and direct foreign investment, the triumvirate should be advised to seize the chance the downturn has given them.
When viewed from a bit of altitude, they have a political choice: either they can try to dictate events on their own terms or be carried along and, ultimately, drowned by them.
Unfortunately, instead of going it alone with muscular intent, they seem to be singing to someone else’s tune.
For example, in recent days they have trooped out the “fundamentals are sound” slogan again. As tax revenue collapses, unemployment rises and house prices, lending and retail sales slump, it is clear that the fundamentals — whatever they may be, because they change from day to day — are obviously not sound.
Listening to this blather is like hearing the chief executive of a company complain that his share price is falling because of malicious market rumours or the reckless use of short- selling by traders. Complaining won’t solve anything, but results will. The best way to defeat the cynics is by generating profits which is, in the long-term, the only outcome investors are interested in. To do this, the chief executive has to identify the company’s problems and sort them out.
The triumvirate needs to do the same thing and should realise that it is not in their political interest to underplay the crisis or in any way soften the message. At the moment, the group has been seduced by the fundamentalist school of economics.
Like the fundamentalist approach to Islam, the fundamentalist school of economics has always detested dissent. It functions via shibboleths.
The fundamentalist message and its mantra is a smokescreen for the banks, auctioneers and developers. Remember, these people are still trying to sell their outdated concoction of debt and houses. This is the “tent at the Galway races” brigade. They are not the vested interest that the triumvirate should be supporting because they represent yesterday’s tarnished status quo.
It’s time for the triumvirate to cut them loose. It’s time they accepted what the data are telling them: we are on the skids and a new plan has to be formulated based on export-led growth. But, most importantly, it’s time they revealed their political smarts and understand that we are behind them — we all want to see the country back on its feet.
No one expects the triumvirate — a pair of lawyers and a teacher — to have the economic savvy of John Maynard Keynes or Milton Freidman. However, we do expect them to realise that this crisis is far too valuable an opportunity to be wasted.