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— June - July 2010
phOtO: getty iMages
phOtO: getty iMages
to David McWilliams in his
Volvo Estate in a church car-park in Dalkey. In case
that sounds intriguing, the purpose of our meet-
ing was to conduct an interview - on recording
equipment that does not cope with background
noise in public spaces like the coffee-shop we had
just left. McWilliams has a strong personal pres-
ence and is possibly one of the most cheerful peo-
ple you are likely to meet. He is greeted warmly
in his locality where most people appear to know
him. During the last year alone, he has travelled
the world on a punishing schedule while making
the documentary ‘Addicted to Money’, chaired a
series of the comedy show ‘The Panel’, finished
writing his book ‘Follow the Money’ and organised
the controversial Global Irish Economic Forum at
Farmleigh - among many other things.
MC: I want to ask your opinion about the eco-
nomic crisis and Irish media coverage of it.
Morgan Kelly has referred to “group-think”
by which he means how during the bubble
there wasn’t much criticism of what was
going on. In the aftermath, we now have the
‘there-is-no-alternative’ to NAMA version of
group-think . Who or what makes you angry
about the way the media is behaving both
during the boom and afterwards?
DMcW: I think it’s quite obvious what I thought
during the Celtic Tiger because I was almost
completely on my own in saying this is a huge
bubble. I’ve always thought that. I was vilified –
well maybe not vilified – but slagged off. Ireland
is constantly terrorised by conventional wisdom
and anybody who breaks with it can expect to go
through a three-phase process: the first phase
is ridicule; the second is violent opposition
and the third phase is the universal truth phase
when everyone says “sure we all knew it was a
bubble at the time”. And that’s what happened
to me. It’s no big deal. In Ireland we feel we need
permission to ask the obvious. It doesn’t really
make me angry – but it makes me sad.
With regard to the 2008 bank guarantee,
people have accused you of inconsistency
since at first you appeared to claim that the
Minister for Finance, Brian Lenihan, was
acting on your advice but subsequently dis-
tanced yourself from the guarantee. Did you
change your mind?
Well, first of all, I don’t think changing your mind
is the end of the world. The bank guarantee that I
discussed with Brian Lenihan involved a guaran-
tee that would be rescinded after two years spe-
cifically. In a way, it was a bluff, not a policy. Once
this guarantee started to be regarded as a blan-
ket underpinning for all sorts of loans – then it
changed materially from what I was discussing
with the Minister for Finance. The first thing is, if
Brian Lenihan lets the guarantee lapse after two
years, which it is legally supposed to, then it has
worked completely. Then we’re back to square one
whereby we are in a position where we can sim-
ply get the creditors into the room and say “listen
lads, we’ve no money”. The whole idea was sup-
posed to stop a run on the banks. It’s like being a
fireman in a forest fire where you have to ask your-
self whether you stop it or let it blaze on.
And the second thing is the guarantee has given
two years to figure out how bad things are at the
banks – and it’s not just Anglo; it’s across the board.
Once you’ve figured it out, you simply withdraw the
credit and say to creditors “sorry guys you simply
backed the wrong horse and let’s do a deal”. And
that’s capitalism. But what’s happened in the last
while is that it’s being said that what is good for the
banks is automatically good for us.
But didn’t you depart from your capitalist
principles by recommending a guarantee
in the first place?
I’m not a pure capitalist. I think that what you’ve
got to do if you believe you can stop something
traumatic from happening is do it. I don’t believe
in this Austrian School idea which says that all
recessions are the seeds of the next recovery
– or that humans are infinitely able to react to
unemployment. They’re not. My father was laid
off many years ago and I know exactly what it’s
all about. Humans are not machines. One of
the reasons a run on the bank is disastrous is
that the big guys get out first. The little guys are
shafted. So there is nothing inconsistent in what
I’ve been saying.
What is the distinction between Lenihan’s
version of the guarantee and your own?
I hadn’t expected that the guarantee would
extend to sub-prime debt. If we let the guarantee
lapse this coming September as it is supposed to,
it will have achieved its aims. It will not have been
a flawless policy but the best we could have done
in the circumstances.
The least worst thing?
I don’t want to be wise after the event. I was very
vocal both privately and publicly in saying we
had to do something quite radical and different
– something that takes the markets by surprise.
Having worked in the markets, I know what they
are like. In many ways this is just a bluffing mech-
anism. You’ve got to hit them where it hurts – do
something that is so outlandish that they back off
– show them you are in control.
It surprised more than just the markets,
though.
But what was the alternative? To let the banks go
bust? What the Europeans have just done with
Greece and the Euro crisis is exactly the same
thing – it’s effectively a blanket guarantee.
A lot of people suspect that NAMA at its core,
particularly the Special Purpose Vehicle, is
essentially corrupt – that the secrecy about
exactly who, what and how much is involved
may be designed to cover up and compensate
for a multitude of sins. What do you think about
the SPV and how it will work? Would you agree
it is a scandal that something so profoundly
undemocratic and lacking in transparency
has been allowed?
David McWilliams
David McWilliams
… and the vindication of his impure capitalism
interview miriam cotton
PHOTOS: PHOTOCALL IRELAND
Also in this section
Corporation Tax
Obituary: Danny Pender
Mapping the Golden Circle
Fianna Fáil changed us
Dublin Planning
Book Reviews: Niall
Crowley, Wiliam Campbell
The political alternatives
— June - July 2010
Yes. The Ombudsman was on the other day talk-
ing about the fact that the Freedom of Information
Act has not been extended to cover NAMA which
is always very worrying. Nonetheless, it’s not the
SPV that is the problem, it’s the logic of NAMA
that is the problem - that this is a deeply cynical
move.
You’re back to the group-think you spoke
about earlier. If in a small country you’re spend-
ing €.bn on professional fees, which is what
NAMA will do, it buys a lot of silence. The man
who writes the cheque calls the tune.
I don’t think I’ve ever seen you use the word
corrupt about NAMA.
Look, Ireland is a deeply corrupt country – the
whole boom was corrupt. You don’t have to
use the word corrupt to know that. The county
councils were corrupt, the bankers were corrupt,
the landlords. The developers – I’m not sure if
they were actually corrupt but the Galway Tent
was a deep corruption of our system of govern-
ment. Look at the golf classics that Brian Cowen
organised for himself – look at those things. It’s
legal but there is a difference between being
legally right and morally right
People on the left are bemused to put it mildly
to see all the capitalists apparently unaware
they are running around with their theoretical
trousers round their ankles yet still sneering at
more egalitarian theories of economics.
Who is sneering?
I’m not talking about you personally. I’m just
saying that the left can’t but know that this
collapse has evolved pretty much exactly as
Marx, for example, said it would and despite
the terrible consequences of it there is still little
or no fundamental questioning of the capital-
ist system in mainstream politics or econom-
ics. Speaking to John Gibbon in the Irish Times
recently, you referred to what you called “peak
everything” and said that we are not just facing
into “peak oil”. I think you had been visiting a
smog-saturated city in China…
Yes, I was making the documentary ‘Addicted
to Money’ and it was not supposed to end with
the environment – the script I had written had
a totally different ending. I am asthmatic and I
was in a polluted environment where I started
to realise that in actual fact the big issue is ‘peak
everything’. It’s an iteration of something that
we humans have got to come to terms with - that
there are a lot of us around, that there are only
finite resources.
Yet in another context you would say that
we need to return to growth if we are to have
recovery.
Not necessarily. I’ve never been a growth fetish-
ist at all – ever. I think the idea of steady econom-
ics with a zero growth rate is a very interesting
one – you don’t necessarily need to keep pump-
ing the machine all the time. The reason I think
capitalism works is because I actually think it is
fair. If you can create an environment where peo-
ple can maximise their own potential – that’s the
ideal world.
But that doesn’t incorporate any concomi-
tant sense of responsibility and duty.
It does!
But where is that happening? There is mas-
sive inequality; we’re engaged in horrific
wars which are really just resource grabs –
all in the name of capitalism.
Who is the worst polluter in the world? China and
Russia are right up there.
The US is the worst polluter.
Pollution is not an ideology. East Germany was
in a terrible state after the collapse of the Soviet
Union. The vandalism in the mind of the polluter
isn’t associated with any particular ideology.
Would you agree that media coverage of
the left is a) virtually non-existent and b)
extraordinarily biased in a hostile and rather
superficial way? The crimes of 20th-century
Stalinist socialism are held up as an inevita-
ble outcome of trying to create a fairer soci-
ety. Yet the crimes of capitalists over several
centuries go virtually unremarked in many
instances. Genocidal land and resource grabs
have been going on all the way down the line
but they’re sanitised and sold in the name of
God and democracy.
Do you think so?
Yes. Absolutely.
I don’t see the world that way. Take the war in Iraq
for example – there was almost uniform condem-
nation in the media.
Not at all!
I’d have said that was a logical position – that
the United States was simply fighting an unjust
war. However appalling Saddam was and I’m
not sure he was much more appalling than peo-
ple in other places who have been propped up.
But my point is that if you look here for exam-
ple, partnership is a great example of the social
democratic left of center that has had almost
uniform media support.
This is a Catholic country, this is not a left wing
country. There is a lot of corporatism in Ireland –
so that partnership fell into that sort of area. It’s a
sort of soft left
You realise that there is the narcism of small
differences in many countries. I think in Ireland
the differences between the Left and Right were,
particularly in the partnership were non-existent.
So there was a Narcissism on both sides. But in
actual fact they both sat down and implemented
the same policies.
The Labour Party?
The Labour Party, the trade union movement…
The Labour Party has almost completely
abandoned its socialist principles.
I think you’re probably right.
These groups were
sitting down in rooms and hammering out deals
with IBEC. Really, the Left gave up on the Left!
It’s still incontrovertible that our media is
dominated by centre and right perspectives.
Do you really think so? I suppose the difference
is that I don’t think of the world in that way.
I don’t see the ideological issue as being the
most crucial issue facing us. The most urgent
issue the country is facing is that we have a
kleptocracy. We are allowing the banking sys-
tem to suck all of the resources out of the coun-
try. It’s actually cronyism. It’s a gombeen form
of capitalism. If you read Synge, he describes
a person who on the one hand is agitating the
local farmers to go against some of the land
acts but on the other hand is aggressively
throwing those farmers off their land. The
gombeen man is putting the land back up for
sale and giving the people the fare to America.
It’s the same thing now. The gombeen man is
central to the whole thing.
What is the Abbey production going to be
about?
It’s very simple really. The idea is that in the
crisis Ireland splits not so much between rich
and poor, or urban and rural or young and old
– but between insiders and outsiders. Hopefully
it’s humorous. It’s gentle. I suppose I’ll be a bit
like a stand-up economist!
The full version of this interview will shortly be published on
the MediaBite website with commentary.
‘Outsiders’ will be showing from the 16th of June on the
Peacock Stage at the The Abbey Theatre in Dublin.
David McWilliams
