The Lockdown Was Unavoidable - Bailing Out The Private Banks Again Is Not!
So it begins. In the early hours of Sunday morning (May 17) the Irish Independent published a story about another possible private bank bailout as a result of the Covid-19 crisis.
The timing of the story, coming just 24 hours before the lifting of some lockdown restrictions in the Twenty-Six Counties, was deliberate. And the the message was clear - the return to normality must include the ‘normal’ bailout of private banks and other private companies with public money.
The man quoted in the article preparing the ground for a future bank bailout was none other than John Moran, the former head of the Department of Finance in the Twenty-Six Counties.
Before his stint as Secretary General Moran was a founding member and senior executive of Zurich Capital Markets, a hedge-fund that was fined almost $17,000,000 ($17m) by the US authorities for aiding fraud and illegal trading. He also worked for a time for the high-profile law firm McCann Fitzgerald.
John Moran, former General Secretary of the Twenty-Six County Dept of Finance wants public money to be pumped into private companies and private banks.
Moran encapsulates the nature of gombeen capitalism in Ireland, where the lines between the interests of the Nation and the interests of private have been blurred to the point that it’s impossible to say where one ends and the other begins.
Twelve years ago, on September 28th, 2008 Fianna Fail and The Green Party issued a blanket guarantee to the entire private banking sector. The decision was taken by a handful of politicians following late night meetings with senior executives from the private banks and senior civil servants. During that period we were told that the ‘pillar banks’ were ‘too big to fail’.
Now Moran and many other bankers, economists and various other ‘experts’ are telling us that the state must either bail out private businesses to allow them to repay their bank debts or risk having to bail out the banks directly.
Micheál Martin and Eamon Ryan were part of the government that bailed out the banks in 2008. The government they want to form with Leo Varadkar will not hesitate to bail them out again.
What difference does it make to the people of Ireland whether the banks are bailed out directly or indirectly?
What difference is there between pumping public money into private companies to allow them to pay back their bank loans and pumping public money directly into the banks?
The net result will be the same - vast additional debt piled onto the existing mountain of public debt. And for what? To restore the private banks to temporary stability and profitability until the next financial collapse, until the next public health emergency, until the next unknown crisis, be it man made or natural.
The children of today will already be years in the workforce before the debts from the first bank bailout are repaid. Another bank bailout will lump our children’s children with debt before they are even born.
The public health threat posed by Covid-19 in early March was real and severe. Years of under-funding and mismanagement of the Irish healthcare system left it ill-prepared for, and unable to cope with, a widespread outbreak of deadly pathogen like Covid-19. To protect thousands of human lives a lock-down was unavoidable, but another bailout of the private banks is not.
Covid-19 has demonstrated just how very fragile the capitalist system is - how businesses and individuals exist on a week to week basis without stability, certainty or financial reserves.
Every aspect of our economy and society is constrained, restricted and limited by debt to the private banks. Tens of thousands of superficially healthy businesses that were in fact existing to pay extortionate rents, crippling mortgages, overpriced insurance, high-interest business loans and very little else. Businesses that employed hundreds of thousands of workers who now face an uncertain future.
How frail the mighty private sector turned out to be. Within a fortnight of the crisis developing the captains of industry, the alleged entrepreneurial engines of the economy, were laying off and furloughing workers in their hundreds of thousands.
It was the state that stepped up to foot the bill when there was no profits to be made. It was the state that provided workers with Covid payments so that they could continue to pay their mortgages, car loans and other personal debts. It was the state that provided private businesses with financial lifelines. It was the state that was there for the people when the profiteers ran for cover.
And now the likes of John Moran who want us to believe that the state must choose between bailing out private companies now or bailing out the private banks later. Or possibly both.
There is, of course, another option which the apologists for gombeen capitalism will not even countenance. An option that would end the boom-bust capitalist merry-go-round, where the private sector rakes in the profits during the boom and the state take the hit during the bust.
Covid-19 presents the Nation with an opportunity to choose a better future then existed pre-Covid - to choose a stable economic model where the state is the primary provider of low cost credit to business and individual alike. To chose an economic model that isn’t controlled by a handful of money lenders, speculators and gamblers. To chose a New Republic based on a new democratic economy.
This is what Éirígí For A New Republic wants to see. If you want to join the fight for real change you can do so here.