OPINION:There is no evidence to support assertions that trade unions are at all culpable for the mess the country is in
WE ARE in disturbing and uncomfortable territory when opinion becomes confused with fact, when simply claiming something is true becomes enough to make it so.
Media columnists and commentators are privileged with a public platform from which to air opinion and analysis. But that privilege also carries a heavy responsibility for accuracy, objectivity and backing assertions with actual evidence.
It is a predicament best expressed by the adage which governs the ethical code of the UK's Guardiannewspaper: comment is free, but facts are sacred.
Two Saturdays ago, this newspaper’s political editor, Stephen Collins, identified trade union leaders as being “involved through social partnership in framing the policies that bankrupted the State”. He went on to say that union and employer leaders had more influence on budgets between 1997 and 2001 than most government ministers.
To be blunt, the claims made by Collins are hyperbolic nonsense. They remind me of the tale told about former US president Lyndon Johnson who, when tackled about a rumour he had circulated concerning an opponent, replied: “Let’s see him try to deny it.”
There are a number of problems with these claims. First and foremost, and most obvious, is the fact that Collins provides no supporting evidence whatsoever. Nothing. He cannot make it so just because he says it was so.
There is a wealth of academic and other material on social partnership over the years (and I can supply Collins with the references). None of it would support his assertions. Nobody – least of all Ictu – would contend the system was flawless, but it is not at the root of our crisis.
Secondly, the idea that unions enjoyed more influence over budgets than ministers is so absurd as to be almost unworthy of repudiation. There is an extensive record of disagreement on fiscal and other issues between Ictu and government going back many years.
Indeed, the Ictu view that Ireland was following the wrong growth model was a matter of public record – a fact that was often reported in this newspaper. Space does not allow for the detail of these policy conflicts to be outlined here. But I would be more than happy to furnish this detail to Collins or anyone else from The Irish Times.
But there is an altogether more fundamental problem with the opinions presented by Collins: the flawed analysis he presents with regard to the cause of our crisis. It is an analysis heard from current Government Ministers, one which tries to minimise the role of bankers and instead points the finger at middle-income public servants, the unemployed and now, their latest target, people on the minimum wage.
By now, most commentators are agreed that the root cause of our problems was the recklessness of private banks and the incompetence of Government in guaranteeing their enormous debts. The fact that government began to dismantle the tax base from 1998 onwards was another failing. Again, it is something we are on record as opposing.
It was these factors which spurred the intervention of the International Monetary Fund (IMF), the European Central Bank and the European Commission. Their mission was designed to save the European banking system and the single currency. They did not arrive here because they were worried about the minimum wage, or the size of our healthcare budget.
In 2003 the net foreign debt of our banking sector was equivalent to 10 per cent of gross domestic product. By 2008 it was 60 per cent. When interbank liquidity dried up in the wake of the US crisis, Irish banks were left exposed through huge levels of property lending, some of which was not even properly documented.
They lied about that exposure.
The Government’s crucial mistake was to equate banking debt with sovereign debt. It initially guaranteed €440 billion of deposits and investments, in the form of senior and subordinated debt (the bondholders). So far it has pumped in €50 billion to recapitalise the banks, most of whom will, in due course, wind up in public ownership. A further €35 billion has been secured, from the EU-IMF and ECB for “contingencies”. Quite where the bottom of this black hole lies, no one knows for sure.
Thus, as has been suggested by Prof Barry Eichengreen of the University of California (Berkeley), if we could somehow draw “a bright red line” between bank and public debt our prospects would be far brighter. Difficult yes, but certainly not the impossible situation we have now.
Comment is indeed free, but facts must be treasured.
David Begg is general secretary of the Irish Congress of Trade Unions. He is also a governor of the Irish Times Trust, proprietor of
The Irish Times