Why are the government in thrall to the fat cats/bankers/developers.

tech77

Hi.
I don't know that much about economics/politics but i'm reading the paper again today about that clown of a financial regulator getting a few hundred thousand on retirement even though he was asleep at the wheel for the duration of his tenure.
I'm reading about Lenihan completely missing the bit about the 7 billion transfer to Anglo.
I'm reading how the government are reluctant to investigate the banking irregularities with any real aggressiveness.
And of course how Joe public has to ultimately bail out the banks for their fcuk ups with levies and whatnot.
It just constantly comes across that the people who will experience the least pain in all this are the fat cats.
It's populist to post this but it's just so true and so obvious, it's unbelievable.

So can someone tell me (me who has with little real understanding of politics and economics) what's it all about.
Why are the government in absolute thrall to the bankers and the developers.
Is it simply the case that in a capitalist economy when they fcuk up you just have to bail them out by royally fcuking Joe Public and treat them nicely or is there something else going on.
Is massive corruption at the heart of this.
i mean apart form anything else, just taking the incompetence of that clown regulator alone, why is such gross incompetence rewarded, he doesn't wield that much power does he, he doesn't know where the bodies are buried.
So can anyone tell me what this stuff is all about?

Senna

For their own person and financial gain.

tech77

Senna wrote: »

For their own person and financial gain.

So you're saying that members of the government, by taking it easy on the bankers and developers, gain financially?
I can see how having big business on your side would benefit them politically (donations for election campaigns for re-election etc) but they're 22% in the polls at the moment- so how is being nice to these fat cats helping them now.
Why don't they just make them take some of the pain?

Are you talking about the high likelihood of actual bribes/corruption for personal gain in the past that they're now too deep in the sh1t to get out of?
Again, i'm naive when it comes to politicoeconomic matters so sorry, but i'd really like to understand this better.
As i say, if you just take the regulator's 630000 reward for gross incompetence alone, i mean- what's that all about.
How are the government (the people supposedly with the power) gaining from leaving that bit of madness go unsanctioned?

ronbyrne2005

You have to look at those close to politicians such as party members who benefit from contacts, contracts , planning permissions etc. Many FF members who dont/havent run for election have made fortunes through their contacts via political system. A politician does not have to directly receive money/favors to be corrupt/compromised. The likes of fianna fail are like a big family/tribe that look after each other first and foremost and then the national interest. I wonder if we banned political parties and insisted on all independents would we be better off?

dotsman

The reason you believe this is more down to the decline in journalistic standards as opposed to there being any truth behind the matter I'm afraid.

Developers? Yes, some property developers contributed Fianna Fail campaigns, but to say that all developers are in bed with the government would be grossly incorrect.

Bankers (not quiet sure what a "fat cat banker" is - it tends to be a term used by the tabloids)? No, Irish banks have always, currently are and always will be strongly opposed to supporting any particular political party. Likewise, the government don't do any individual bank employees any favours. However, with the global economy crumbling, and the financial sector getting hit on all sides, the government (and every government around the world is doing the same) needs to ensure that the banks function properly. We can only begin to hope of getting out of this recession after the banks begin to function again. It's nothing to do with helping their friends (very frosty relations to be honest) - it's a simple fact of life!

P.S. The levy, pay cuts etc have nothing to do with "bailing out the banks". They are to make up the serious tax shortfalls due to the ridiculous increases in government spending over the past decade (now that it no longer receives a huge income from the stamp duty, PAYE and VAT returns). The money being used as part of the capitalisation is from the National Pension Reserves (the government's piggy bank for a rainy day - original believed to be the pension dilemma we will be facing in 10-15 years time). This reserve, already losing money due to the faltering markets, is being used to invest in the banks and keep them running. The government are making 8% per annum on all the money they invest, and will get the money back as soon as the banks are back on the up. As with all investments, the risks are that the banks might collapse (but in this case, the government has a lot bigger worries!).

With regards to the regulator, it's actually a tough one. A complete fcuk up on where they were focusing. Over the past few years, the financial regulator has done huge amounts of work along the lines of the Consumer Protection Code and educating the public (I hope everyone knows what a tracker mortgage is now ). However, as good and all that this was, they were totally off the ball when it came to both controlling the lending markets and scrutenising the bank's accounts (mainly in relation to the cowboy saloon that was Anglo:eek:)