#AngloTapes: A good week for the Irish MSM..?

On the face of it, it was a good week for the Irish Independent. You might call it cynical, or you might call it strategic, you might even call it both, but the release of sound files on Independent.ie got the website the kind of coverage some bloggers would die for…

Questions of course, remain. Sinn Fein and Fianna Fail are both asking how they got these confidential tapes that were previously in the custody of the Garda, and the Quinn family. And Vincent Browne’s question to Fionnan Sheahan about why now last Monday still begs an answer.

The more fervid conspiracy theorists point to poor economic figures for the government and the fact that on Monday and Tuesday questions were being asked of a couple of polls due out tomorrow. It’s surely not a conincidence that the former editor of the Irish Independent was promoted to a new role on Monday:

Stephen Rae will now be responsible for the Irish Independent, the Sunday Independent and the Herald, ensuring that the titles are “platform agnostic”.

The Irish Independent said Rae’s responsibilities would include making sure that the three titles were “structured, resourced and aligned for an increasingly digital future”.

Each paper will still retain its own editor, but Rae will be charged with ensure the titles are collaborative while still retaining their unique tone of voice and ethos.

That principle was very much in evidence this week, with columnists and specialists all teed up on the tapes each with good angles and set to make the maximum impact in the paper off the back of the website’s unique resource (ie the raw material).

Sharing original sources is something has been de rigeur amongst bloggers since our year dot (let’s call it 2001). But the indo’s strategising, marketing and marshalling of some of its best resources is something only a paid operation could have pulled off.

In the process, what did the story us we didn’t already know?

Well, for a start, the pre crisis concensus of just letting the wealth creators get on with destroying creating wealth (aka, light touch regulation) was a lot of cock and bull. With tighter regulation (or at least more transparent reporting) Anglo might have been let go to the wall much earlier in the cycle.

And given the government was being so heavily gamed by banks like Anglo, the seemingly rash/stupid/irrational bank guarantee was probably all the government could do to stop the whole banking system from falling apart.

Meantime, time to crack open the bubbly at IMG. But maybe time for OMG at the maverick Sindo which has been let paddle it own often eccentric canoe for more than a generation. In this regard, “platform agnostic” may be heard as an ominous rumble by the old lags.

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  • John Ó Néill

    Until some context to the release of the tapes is given, it won’t qualify as a good week. People sense they are being played here and the media isn’t rushing to defuse that.

  • Mick Fealty

    Well, maybe. I still think this was exceptional orchestration between online and offline.

  • megatron

    It is very strange that the media & official Ireland indulges in an untrue narrative which is very costly to the country. Not sure what the point of it is. The facts are:

    (i) Anglo / Other Irish banks went crazy. This was unquestionably facilitated / nutured / encouraged by the environment / society / regulation at the time.

    (ii) The bank guarantee was introduced – against the wishes of Europe (the real reason it was against the wishes of europe is that the perception of the time was it would enable Ireland to get off for free – this night in september was the final night the government actually acted in the national interest.

    (iii) The bank guarantee was only short term in nature and none of the 30bn to anglo / 40bn to others actually had to be paid – even after the guarantee. Bond holders could be burnt at any time (there remained even into the FG / Lab bondholders loads of unguaranteed senior bonds.

    (iv) The obvious conclusion is that it wasnt two or three or ten eegits at anglo (or Sean Quinn or anyone else borne on the Island of Ireland) who forced us to bail out the banks. It was the ECB.

    Therefore this narrative that the Irish were reckless / it was our fault is totally bogus but suits the ECB/German agenda totally. The fact that it is not true makes me wonder who is pulling the strings here and why.

  • megatron

    Last comment – if two clowns (funny clowns) acting in a stupid way in a private Company can threaten democracy as Angela said then democracy has a serious problem.

    Deutchland Uberalles indeed.

  • DC

    (iv) The obvious conclusion is that it wasnt two or three or ten eegits at anglo (or Sean Quinn or anyone else borne on the Island of Ireland) who forced us to bail out the banks. It was the ECB.

    Twice now Ireland has played a wee bit of serious footsie with the Germans, twice it has got its fingers burnt – and after these tapes i wouldn’t be a bit surprised if a good kick up the backside wasn’t on its way from mainland Europe. Why?

    (i) For being silly!

    Last century it was the Brits, this century the ECB, never the Irish oh no lol.

    People sense they are being played here – the people on the tapes?

  • megatron

    At DC – not sure how to respond to that point as struggling to see what exactly you are saying there.

    Summary opinion without any evidence. Standard for slugger I suppose.

  • Mick Fealty

    Jasus lads… DC, put down the wine. Step away from.the keyboard…

  • Mick Fealty

    Meg,

    Here’s Dan O’Brien (last link above):

    “By far the greatest policy error was to allow the property boom to continue while ignoring the risks. By late September 2008 there were only bad choices available. A guarantee was the only real option. A full inquiry into the banking fiasco might establish that, and much else besides.”

    The Germans were NOT responsible for THAT. Your (II) and (iii) are widely held views and are actually dangerous to follow, because they provide a false assurance against the same thing not happening again…

    We need deep evidence of what actually happened and clear shifts in both policy and culture to make sure it does not happen again…

  • SeaanUiNeill

    Mick, “We need deep evidence of what actually happened and clear shifts in both policy and culture to make sure it does not happen again…” With which I utterly agree, but are these necessary shifts likely to even be considered by anyone “inside” the power structure of the banks and the state?

  • Alias

    “The Germans were NOT responsible for THAT.”

    They were, since the base interest rate is set by the ECB in accordance with the demands of the German economy. In addition German banks were busy making huge profits lending money to other eurosystem banks to fuel property prices in other eurosystem regions, including Ireland.

    These German banks massively over-leveraged themselves in the process (no German bank had a leverage ratio of less than 52 in 2010) but they had the advantage of knowing that the Germans (the actual controllers of the EU) could use that regime’s control of other eurosystem regions’ sovereignty to force them to underwrite the debts belonging to those German banks while also ensuring that the massive profits enjoyed by those banks fuelling the property bubbles in other eurosystem regions would not suffer even the slightest reduction.

    The Germans also used the control of the EU to ensure that the leverage ratio for banks was unlimited, thereby allowing German banks to leverage to insanely high ratios.

    The Central Bank of Ireland is part of the eurosystem and is 100% under the executive control of the ECB. Its Governor, who controlled banking regulation in Ireland at the time, acted at all times to promote the EU’s interest and not the redundant Irish national interest. That policy implemented by the Central Bank of Ireland was an expansionist monetary policy.

    Indeed, even if the Irish government believed that the policy was utterly nuts they are constitutionally prohibited from opposing it in private and in public. Under the Maastricht Treaty (which is part of the Irish constitution) the government are prohibited from offering any advice whatsoever to the ECB about what policy would be helpful to the Irish economy or what policy will destroy it. They are constitutionally obliged to publically support the policy of the ECB at all times.

    Just as the public are led to believe that Europhile journalists such as Dan O’Brien (who are partisan to the EU’s agenda and use the media to campaign for it) are somehow impartial commentators they are also led to believe that the Governor of the Central Bank of Ireland acts in the Irish national interest.

    Incidentally, the only thing the Germans objected to about the bank guarantee in 2008 was that it gave Irish banks a competitive advantage over German banks. The EU immediately closed off that competitive advantage.

    A property bubble won’t happen again in Ireland because the banks are diverting the public’s income to eurosystem banks and have little money to lend to Irish people for any purpose. However, it can happen again at some far distant point because the factors that led to it remain in place, i.e. the sovereignty over Irish banking regulation and monetary policy has been transferred to the EU.

    Prior to that transfer of sovereignty the total external debt stood at 11 billion punts. Less than 10 years after the transfer the total external debt has exploded to 2.4 trillion euros. That’s what happens when you give your sovereignty away. It is an absolute fact that none of this debt explosion – and it is in personal and business debt and not just mortgages – would have occurred if Ireland did not join the eurosystem.

  • DC

    Potential blame worthy list (a book about to be released The Fall of the Celtic Tiger: Ireland and the Euro Debt Crisis examines the roles of each, so i am reckoning they all had some part to play):

    banks
    builders
    developers
    regulators (the EU, the ECB, the Central Bank of Ireland, and the Irish Financial Regulator)
    economists
    the media
    ‘a property driven populace’

    And overseeing all of this – Irish politicians.

  • Alias

    Also, regarding this europhile created myth that the property bubble in Ireland was the result of a failure of taxation (i.e. to impose taxes on property): this is predicated on ignorance about expansionist and contractionist monetary policies. The principle reason that a central bank’s monetary policy is only nominally impendent from a government’s fiscal policy is to avoid a situation whereby they conflict with each other, i.e. where the latter’s policy is expansionist and the former’s is contractionist. The former is also obliged to follow the policy of the latter. That is also why is is constitutionally prohibited for a eurozone government to oppose ECB policy. In effect, since the government is also constitutionally prohibited from offering any advice to the ECB the government must tailor its fiscal policy to the ECB’s policy to avoid the same conflict.

    Apart from that, taxation used as a contractionist counter to monetary expansion would not have worked anyway since a profit would still be made on the transaction.

  • Alias

    “And overseeing all of this – Irish politicians.”

    Sovereignty is the power to act. They had given that power away to the EU, so you can’t blame them for the failure of others to act. The only way to stop the credit boom on credit cards, cars, conservatories, extensions, exotic holidays 3 times a year, new branches for businesses, etc, is to increase the cost of credit. Instead of doing that the EU kept on decreasing the cost of it.

  • Alias

    “The principle reason that a central bank’s monetary policy is only nominally impendent from a government’s fiscal policy is to avoid a situation whereby they conflict with each other, i.e. where the latter’s policy is expansionist and the former’s is contractionist. The former is also obliged to follow the policy of the latter. That is also why is is constitutionally prohibited for a eurozone government to oppose ECB policy. ”

    To make that a bit clearer: a central bank is only nominally impendent from a government in that it is obliged to support the economic policy of the government. In contrast, a central bank in the Eurozone is totally independent from a Eurozone government. Therefore it is the government who must support the economic policy of the ECB. The government is ALWAYS the tail on the dog. When the ECB’s policy is that borrowing money creates wealth rather than simply creates debt then that is the policy that the government is obliged to support. And as EU chearleader Bertie famously said, the doubters should just commit suicide (since they don’t have the sovereignty to change the policy).

  • DC

  • pauluk

    So is that what blogging is all about, Mick, the cynical or strategic manipulation of information to get more hits? Pretty shallow purpose for exisiting, eh?

  • http://gravatar.com/joeharron Mister_Joe

    Maybe being supercilious and disrespecting people you think are your inferiors is a better reason for existing.

  • DC

    Leaving aside ulterior motives for releasing the information now and just going by the content of the tapes themselves, it would seem Ireland’s economic future at the time was in the hands of David Brent-type characters.

  • SK

    “it would seem Ireland’s economic future at the time was in the hands of David Brent-type characters.”

    ____

    Indeed, if only we had a Sammy Wilson down here to guide us through these choppy economic waters.

  • megatron

    Mick – Everyone wants to focus on the night of the guarantee though which apparently cost us €70bn when the facts show otherwise.

    A better way of looking at it is in terms of the fiscal adjustment. The total required was / is appox €20bn. If no money went to banks it (assuming no second order effects) would have been €16.5bn.

    You are correct that the €16.5bn should be the focus and is not the fault of the germans. Neither is it the fault of anglo though. The UK has the exact same issues.

  • megatron

    DC – maybe not David Brent but any enquiry should examine the quality of public officials and the ability of them to act in the long term interests of the country.

    There will always be David Brents in private enterprise.

  • aquifer

    It is not the Germans’ fault for saving too much.

    The Fianna Fail government failed to regulate and rein in their banks.and did not stem the economic overreliance on construction.

    This was a sovereign cock-up by Irish macho males who thought they knew better than the quiet functionaries in their own government departments, and clearly did not.

    How do you legislate for risky behaviour among people who take the considerable risk of standing for election?

    Other jurisdictions take lumps of economic policy out of the political arena.