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Taoiseach shows an appalling lack of economic knowledge

26 January, 2012 - by Pádraig Mac Lochlainn

Responding to reports that Taoiseach Enda Kenny has attributed the economic crash in Ireland to people going mad borrowing, Sinn Fein spokesperson Padraig Mac Lochlainn said such a fundamental misunderstanding on behalf of an Irish Taoiseach showed an appalling lack of economic knowledge.

Deputy Mac Lochlainn said the statement reflected the fact that this government has no grasp of the origin of the Irish economic crisis and no clue how to fix it.

He said:

“News reports are quoting Enda Kenny at the World Economic Forum as saying that the problem with our economy was that ‘people went mad borrowing in a system that spawned greed, went out of control and led to the crash’. This is an appallingly ignorant synopsis of the crisis and falls into the usual clichéd response offered by those who want to protect the economic status quo – that we were all responsible, that we all went mad and that we caused the mess ourselves.

“The fact of the matter is that people were aggressively cajoled into borrow large sums of money during boom times to buy homes, the prices of which had been driven through the roof because of successive government policies which encouraged property speculation. This government’s policy, which also altered the tax system for the worse, is at the heart of the Irish recession, along with the flow of cheap capital into Irish banks from the European banking system.

“There may have been some people borrowing for selfish reasons. The question must be asked, why were they lent the money? Again we come back to the banks wanting to push their cheap credit supply. However the majority of borrowing by ordinary people was for house purchasing.

“This week we have had the Finance Minister claim emigration is a life-style choice. We have had the Social Welfare Minister imply unemployment is a life-style choice. And now we have the Taoiseach claiming the recession was caused by people going mad borrowing.

“And this man is speaking for and on behalf of the Irish people at an international conference.

“This remark is offensive. I believe the Taoiseach owes an explanation to the Irish people, now expected to carry the tab for the failure of his government and the last, and the banks, for these remarks.

“If the Taoiseach doesn’t know what caused this crisis then how can he possibly provide a solution? This explains why the government is ready to sign up to an austerity treaty.” ENDS

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