Sunday, April 05, 2009


Masters of Dark Arts cast a bitter spell

We can fix this country if we insist on fairness, logic and an equality of opportunity for all, writes Gene Kerrigan

By Gene Kerrigan

Sunday April 05 2009

The market is back for what used to be called "white mince". It was a staple food for a lot of people in the bad old days of the 1980s.

It's not really white, more like pale pink. The mince on the top shelf of my local supermarket is the "healthy option", guaranteed not more than five per cent fat. On the bottom shelf, the low-priced "white mince" is guaranteed not more than 28 per cent fat.

For those who can't afford even that, there are the food queues. All across the country, people struggle desperately to hang onto their jobs, their homes, their lives. Next Tuesday, having already decided to deprive Cystic Fibrosis patients of life-prolonging treatment units, the Government will announce new ways to help us "share the pain".

Meanwhile, one banker turned down a top job because it pays a mere €360,000. He knows he won't go short -- there are lots of high-paying positions at certain levels. And RTE announces that bank bosses want to "renegotiate" the cap on salaries -- they're upset that the top money is €690,000, the poor darlings.

There's a pretence that certain people are worth big money, because they alone are Masters of the Dark Arts of Finance -- they include bankers, brokers, consultants and economists. It doesn't matter that bankers and their wealthy clients and their favourite politicians engineered the meltdown of the economy. Despite their record, they remain Masters of the Dark Arts. In devising strategies for fixing the economy, the Government listens to them.

How good are they? The Master we've picked is not a banker, but one of those celebrity economists who never stops publicly demanding this or that measure. Jim Power, Chief Economist with Friends First. Let's look at his record.

Jim was once worried by the credit bubble. In 2004, he described bank practices as "nutty". He warned, "When things go wrong they go very wrong". In March 2006, he warned that "a significant correction to house prices would . . . undermine the overall economy". Which is what happened.

"An economy cannot grow on the basis of the public sector and the housing market indefinitely," Jim said.

He called on policy makers to "focus on nurturing an indigenous and sustainable economic base".

This was sensible. Jim is a smart guy.

By February 2007 he was more optimistic. "Nothing in the overall data" suggested a hard landing. At a round-table discussion he suggested that the Regulator might take "a more flexible approach to stress testing" for loans. Odd advice, given that the regulator was not so much flexible as limp as a wet noodle.

The following month Jim was sure there was no bubble. "The market looks set to remain solidly based. Beyond 2007, house price inflation should settle down to levels broadly consistent with general inflation out to the end of the decade."

A "soft landing" was in sight. "The fundamental demand in the marketplace is still strong and is not about to disappear,'' he said in April 2007, as the fundamental demand was about to disappear.

It was about the time of Richard Curran's TV programme warning of economic dangers. "There is currently an inordinate amount of negativity permeating Irish economic debate," Master Jim told the Heineken Ireland Open Forum, in Cork.

A report said he warned against the "merchants of doom" who were risking the country's future prospects. Merchants of doom, huh? Remember that phrase.

In January 2008, "After more than a decade of uninterrupted growth, the Irish housing market finally came a cropper in 2007". Another four months and Jim mused that, "2008 is certainly turning out to be a challenging year".

Back in June 2007 he knew that a slowdown "should not be of sufficient scale to seriously undermine the overall economy". By November 2008: "I reckon the majority of first-time buyers who bought into the market over the last three years are in negative equity". (These, of course, would be the people who ignored the "merchants of doom".)

By January 2009 Master Jim was denouncing those who demanded we all "talk up the economy". He complained: "One is now fearful about saying anything negative in case one gets vilified or accused of being a . . ."

And here the average Soapbox reader surely knows what's coming. ". . . merchant of doom". Master Jim, in short, was worried about being denounced by . . . well, presumably by Master Jim.

The government, Jim complained, "only took advice from people who told them what they wanted to hear and they never listened to anyone who was criticising them".

To which we can only say, Duh.

We must emphasise that there's nothing spectacularly unique about Master Jim. He is representative of that whole class of Masters of the Dark Arts who spent most of the past decade talking through their arses.

In fact, Master Jim at least spotted the dangers, around 2004 -- which many of them never did.

Today, it's the Masters of the Dark Arts who are directing the debate on the emergency Budget, on the solution to the banking crisis, and on how we should "share the pain".

Like the rest, Master Jim is all for "wage restraint, major cuts in public spending . . . a proper financial regulatory framework". (One, perhaps, that's not so "flexible".)

Last week the Irish Times reported that he wants the Government to consider a cut in the minimum wage, because it's a "major source of lack of competitiveness".

This is the same Master of the Dark Arts who last July rejected a cut in the minimum wage, as scraping the bottom of the barrel.

This country is broken. If and when and how it gets fixed will determine how we live and how many are forced to leave the country. It will determine how many of us will die prematurely on hospital waiting lists.

The hills are alive with media airheads insisting that we not "point the finger" or "play the blame game", that we must listen to the Masters of the Dark Arts as they prescribe the amount of pain we all must bear.

The vast majority of us didn't gamble and didn't party or borrow more than we could afford. The vast majority of us worked and paid our taxes conscientiously.

Now, the Government has drawn up measures that will shred our lives -- this in a country where there are Masters of the Dark Arts who turn down jobs because €360,000 isn't enough, where €700,000 is deprivation.

The Government is struggling. They see their job not as looking at the broken pieces and putting them together in the most logical way. For instance, nationalise the major banks, throw out the clowns who run them, let outfits like Anglo die.

Instead, they seek to restore things exactly as they were -- to maintain the old relationships, the status of the Great Ones. And, above all, to maintain the ratio of earnings between the Great Ones and the rest of us. To do otherwise is to breach a sacred tenet of the Dark Arts.

We can fix this country, if we insist on equality of opportunity, equality of democracy, if we insist on fairness and logic. If we stop genuflecting to the semi-religious economic prescriptions put out by people whose record doesn't -- to say the least -- inspire confidence.

And, the next media airhead who tells me that we must all "share the pain", that some must go jobless and hungry while others continue their obscene spending, is going to get their face rubbed in a plate of white mince.

- Gene Kerrigan

So, yeah, all our health care problems will be solved if--when!--we go to government health care.


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