Ruling class has used its incompetence to flee the consequences of its incompetence – an awe-inspiring feat

FIRST, AN apology. Over recent years, I may have given the impression that Ireland is dominated by an elite outstanding only in its incompetence.

I now realise that our ruling class has a brilliance that borders on genius. The only problem is that all of its ingenuity has gone, not into creating a decent and sustainable society, but into self-preservation.

Is there another elite in the world that could have emerged from the catastrophe it created so intact, so brazen, so self-assured as ours? If there is a secret global convention of smug fat cats, our guys must be the star inspirational speakers.

It’s not just the money. Colm Doherty’s ability to walk away from the wreckage of Allied Irish Bank with a cool €3 million is indeed exemplary. The way the heads of semi-State bodies, patriots to their fingertips, managed to increase their financial packages as the bubble burst is dazzling. The chief executive of the ESB, Pádraig McManus, who earned over €750,000 at the end of 2009 – almost €100,000 more than when the crisis hit in 2008 – must be a rock star among his peers.

Nor is it even the evasion of personal accountability, though that is outstanding. Consider the Department of Finance alone. What happened to the head of the department’s banking division, Kevin Cardiff? He was promoted to secretary general. Who is the department’s chief economic adviser? Jim O’Leary, who sat on the board of AIB between 2001 and 2008, when it was helping to destroy the country.

More dazzling than any of this, though, is the ability of the elite to control the story. Ask yourself a simple question: what kind of report into the banking fiasco would the insiders want to see? They would want, above all, two things. First: no names, no pack drill. Second: blame everyone and therefore, by implication, blame no-one in particular. Step up, Mr Nyberg. The Nyberg report does, admittedly, have some sensational revelations.

“Governance at also fell short of best practice.”

“The pressure for conformity in the banks has proven to be quite expensive.”

“There may have been a state of denial in the Central Bank”.

“Many, perhaps most, trees appear to be composed of a woodlike substance.”

“It is possible to surmise that a creature which waddles and quacks may be a duck.” (Two of these statements are not in the report.)

Beyond these generalities, nobody has to answer for anything. The excuse for this is that “during the period leadership . . . changed repeatedly in most private and public institutions discussed; this makes apportioning individual responsibility for strategic or longer-term developments impractical”.

This is high-grade piffle. “Leadership” did not change constantly. Throughout the period between 2002 and 2008 when the bubble was inflated, Bertie Ahern was taoiseach. There were two ministers for finance, Charlie McCreevy and Brian Cowen.

AIB had one chairman and two CEOs. Bank of Ireland had two CEOs and two chairmen. Anglo Irish Bank was dominated by just two men – Sean FitzPatrick and David Drumm, and Irish Nationwide by one – Michael Fingleton.

A similar situation prevailed at the department of finance (two secretaries general), the Central Bank (one governor) and the financial regulator (two regulators). The picture is one of extraordinary continuity – 18 people at the top of all the key institutions over the crucial six years.

And so to the second thing the elite would like to see in a report on the banking crisis – we are all to blame. Nyberg is not wrong about this in the sense that many different forces in society colluded with what was going on. But spreading the blame so widely misses two key points.

One is that the vast majority of people continued to live on what were, in Irish terms, very modest wages. The second is that most of society simply could not have had the information to make rational judgments about fiscal and banking policy.

But Nyberg does inadvertently reveal the ultimate genius of the elite – its ability to turn its own incompetence to its advantage. Thus, for example, the directors of the banks showed gross negligence in not bothering to document or record their discussions. This manifests the attitudes that made their supposed stewardship so disastrous. But it also protects them from subsequent scrutiny.

The same goes for government. The supreme idiocy of the decision in September 2008 to underwrite all the liabilities of all the banks is obvious from the lack of documentation of the most important economic decision in the history of the State. (“Proper information”, as Nyberg points out, “is a precondition for any crisis management based on reality”.) But the very fact that the decision was made on the bureaucratic equivalent of the back of an envelope means that the Nyberg report simply has nothing to say about it.

You have to be in awe of a ruling class that can use its incompetence to escape the consequence of its incompetence.

If they’d put half the talent they’ve displayed in protecting their own power into running the country, we’d be living in paradise.