Jude Collins

Thursday, 10 February 2011

"Liability management exercise" - that's what they're calling it now

How would you like to be involved in a “liability management exercise”?  Mmm – I thought as much.  It’s three words you’re probably familiar with, strung tight together so they rub each other into a state of excited importance. I  heard the term used by a financial commentator on RTÉ radio this morning, even though he knew people were having their breakfast. Later in the interview, he explained that it meant making people liable for their losses; later still that he was referring to the ‘senior bond holders’ whose losses the people in the twenty-six counties have been loaded with. In short, he was talking about the need to ‘burn the bond-holders’, not the Irish people.

Sound familiar? Well when Pearse Doherty suggested exactly that earlier this week in a discussion with Brian Lenihan and Michael Noonan, both the Fianna Fail and the Fine Gael financial experts expressed disdain for Sinn Féin policy. Eddie Hobbs was taking a similar line on RTÉ television the other night – Sinn Féin didn’t know what they were talking about and they’d get torn to shreds in the leaders’ TV debate.

This conflates two matters: that Gerry Adams is a poor TV performer when talking about the south’s economy, and that Sinn Féin’s plans for the Irish economy don't make sense.

It’s true that Adams can seem hesitant in the face of questioning, especially when those questions are of the Mastermind variety – that is, they require the recall of economic facts.  When he stumbles or doesn’t know the answer – for example,  what VAT  in the South is – this is seized on as Sinn Féin economic illiteracy. The truth is,  it’s the people making this judgement   who show fundamentally flawed awareness.

That’s because facts today are less than ten a penny. The internet groans with a universe of factual information, available at the touch of a button. What’s needed are not Memory Men and Women; what’s needed are people – leaders – who can construct a credible policy from those facts.   Unfortunately, excited by reporters’ questions, many politicians  content themselves with firing salvos of facts into thin air, as though that proved they were economically competent. At the same time, a number of commentators and politicians have begun to tiptoe round to the Sinn Féin position, that the Irish taxpayer must simply refuse to take on the debt of big bond-holders

Meanwhile, we await the debate between the five party leaders -  Fianna Fail, Fine Gael, Labour, the Greens and Sinn Féin.   If questions to the panel can flush into the open the specific plans of each party for economic regeneration, rather how many numbers they can juggle in their heads without passing out, the electorate might finally be able to make a bias-free decision about who they will vote for.  


  1. Knowing the VAT especially as a TD of a border county is not something so easily dismissed. As you say, what is needed is to construct a credible policy from those facts. So if you don't even know the VAT, or when it recently changed, how much it was previously and how much it is now, and what the revenue is from it, how it is allocated, or how much difference it makes in the price of goods, what influence it has on both legal and illegal cross border trade... you see how much flows from having a tangible grasp on the most basic of facts. Which Adams does not have, or seem interested in acquiring. (After all, it's been a few years since his ignorance of such matters was grossly exposed; if he was serious about the job he is seeking, he would have improved his knowledge grasp; clearly he hasn't.)

    As to Sinn Fein's plan, or desires, all of it sounds wonderful, more teachers, more garda, more this, more that - until you ask how it will be paid for when the running of the state as it is now can't even be paid for. Raiding the Pension fund is not the answer.

  2. Thanks for your thoughts, Dragnet - always good to hear another perspective. I'm not sure I'd agree that all those things you list flow from KNOWING VAT. My point is that facts are the easy part - computers store them, they're instantly accessible, only daft people go around with their heads stuffed with all the facts. This thing of 'What's the price of a pint of milk?' or 'What's the child benefit payment?' - it really demeans journalism. I might be a brilliant strategist or policy-maker but not be particularly au fait with factual details. I think that's blindingly obvious and I fault the media for sinking to the 'I'm gonna ask you a question you won't know the answer to' level. A version of I-spy, better kept for children.
    Anyway, I do appreciate you taking time to give your thinking. I welcome dialogue of all kinds.
    Slan agus beannacht


  3. It goes to logic if you don't know the VAT (or the child benefit) then all the policy decisions you propose to make surrounding the topic - will be fairly useless. You can't seriously be suggesting that you can make good strategy or policy without knowing the basic facts? If your facts are wrong, if your basic assumptions are incorrect or based on false data, it follows that your strategy or policy will be flawed when implemented.

    Some facts are essential to have a grasp of, especially in an election, for example, that is based in large part on economic issues and what you plan to do about them.

    This is why testing the depth of Adams' knowledge beyond populist platitudes is valuable and it is good that journalists are asking him these types of questions. Which you must admit are really very simple.

    Simple does not equate demeaning. Writing news stories based on shallow soundbites that are uncontested is. Not every voter will get the chance to probe the candidate. This is where journalists come in. And really, asking what the VAT is should not be a hard hitting question, should it? It only becomes so when it exposes ignorance.

    If he doesn't know what child benefit is up north you could quite reasonably say he is well out of touch with his constituents. Both child benefit and VAT -- especially for Louth -- are huge issues given the recent budgets. He should know them.

  4. Thanks again, Dragnet. I can see you're a person of strong convictions. My basic point still obtains, however: factual questions such as 'What is the VAT rate?' are not just silly, they're misleading. Gerry Adams and everybody else can find out the VAT rate at the touch of a computer key. Knowing it simply means you carry it in your head rather than on a computer. It has nothing to do with the quality of the party's policy - which might be awful, or great, but we'll never know if journalists ask kindergarten questions.

  5. How can asking what the current VAT is be misleading? There aren't any shades of gray about the answer: it's a numeric figure. Either one knows or they don't.

    What is misleading is to present an economic policy as if it is the answer to Ireland's woes when one doesn't even know basic - and important - figures like VAT and child benefit.

    Sure, Adams could look it up on Google - the next question is, why didn't he, before he declared he was the solution to Ireland's economic ills?

    What will Adams do when he is in the Dáil, will he be googling on his Blackberry or will he be too arrogant to be bothered with even checking basic details? Or will Richard McAuley have to whisper in his ear.

    You say they are kindergarten questions; how ignorant does someone have to be to flunk even kindergarten?

    Leaving aside the "kindergarten questions", Adams can't even answer the primary maths ones when pressed.

  6. Oh dear, Dragnet. I think we'd better end this little discussion - it's getting a bit...overheated. A pity, really.

  7. which is shorthand for 'i'm losing this argument so i'll grasp the nearest excuse to end it'. pathetic, stupid old man.

  8. Gerry Adams is the only candidate subject to these silly questions, I'm sure if you asked any candidate the price of a loaf of bread or a pint of milk in their local constituency,very few would get it correct.
    The crux of the matter is the parties economic recovery plans which involves 'burning the bondholders', those who gambled in the economic markets and lost, we the Irish people can't afford to bail them out.
    If anyone needs a lesson in economics it's those who are now trying to steal SF's clothes not Gerry Adams.
    Come the election I have no doubt those who accused SF of being 'economic illiterates' will be the ones espousing SF policy.