Andrew Lynch: We've learned little more than the Banking Inquiry is a useless talking shop
David McWilliams does not believe in false modesty.
Yesterday Ireland’s biggest celebrity economist graced the Oireachtas Banking Inquiry with his presence and claimed that he saw the financial crisis coming “earlier than anyone else”.
He then gave a detailed account of his relationship with the late Finance Minister Brian Lenihan, right down to the digestive biscuits he bought in his local Centra before their first meeting.
His evidence appeared to irk the committee so much that at one point chairman Ciaran Lynch pointedly asked: “What did you get wrong?”, which David predictably brushed away as “a trick question”.
McWilliams (inset) is a smart guy and his analysis of the crash certainly deserves attention. The only problem is that we have heard it all before, in media interviews, several bestselling books and even a one-man show at the Abbey Theatre.
By inviting him in to deliver yet another history lesson, the Banking Inquiry has left itself looking like a body with far too much time on its hands.
In fact, this is one of the kinder things you could say about Leinster House’s latest talking shop. After just three months of public hearings, it has already pulled off the amazing feat of generating huge amounts of hot air while simultaneously running out of steam.
Its price tag of €5m may seem small compared to the €64bn in legacy bank debt but ultimately it is just another fancy way of throwing good money after bad.
In fact the Inquiry’s lack of clothes was cruelly exposed by its very first witness last December. This was Peter Nyberg, the Finnish banking expert who wrote a report on Ireland’s financial nightmare in 2011.
After patiently repeating his findings for TDs and senators who apparently hadn’t bothered to read them, he then delivered an ominous warning – don’t expect your investigation to come up with anything new.
Like it or not, Nyberg was right. The banking inquiry is legally hobbled from the start, due to the simple fact that its report cannot make findings against any named individual.
It is like a watchdog that has had its teeth surgically removed – which is why those responsible for Ireland’s downfall will be able to laugh in its face.
True, the public hearings have at least delivered a couple of interesting soundbites.
Central Bank governor Patrick Honohan caused a stir by suggesting that the blood-sucking Anglo Irish Bank should have been allowed to die back in 2008. Professor John FitzGerald of the ESRI admitted that he failed to spot the danger signs and said he would regret this “until the day I die”.
When it comes to anything that might be of practical use, however, the Inquiry has drawn a blank. Ciaran Lynch’s committee is so short of ideas that it plans to call in some newspaper editors and quiz them about the size of their property supplements.
This, needless to say, will not add one iota to our understanding of the housing bust – it will simply be another way for politicians to convince themselves that they are doing something important.
The Inquiry should finally produce some decent political theatre in April when ex-Taoisigh Bertie Ahern and Brian Cowen are likely to take the witness stand. If the going gets rough for Bertie or Biffo, however, they can always fall back on the old defence of ‘Cabinet confidentiality’.
Their appearances will make the whole affair look more than ever like a political show trial, cynically timed to embarrass Fianna Fail in the run-up to a general election – and a neat way for the Government to spend €5m of public money on making itself look good by comparison.
During his evidence yesterday, David McWilliams twice opened up his laptop and proudly played a 2003 clip of himself declaring: “The Irish housing market is a scam.”
Whether intentionally or not, McWilliams’ appearance has helped to expose another scam, but are any politicians brave enough to pull the plug on this one?