David Norris (Independent)

There is a changing of the guard. I welcome my old friend from "Operation Transformation" and bid a sad farewell to my friend, the Green Party Minister of State. It does not matter much who is sitting in for the Government because this is not a terribly serious debate. I asked at the beginning whether it would be rolled over to another day and I was assured it would. I was on my way home only to be told it would not and since this is one of the critical moments in the history of the country, I considered it was important that I should say something, but it is just a marker. That is true for a few other Members because I listened to one or two contributions and they were rambling. There was inevitably a lack of focus because there has not been time to digest or examine the document in detail. There is a certain lack of seriousness. We are just a decoration, and that is part of the problem. There has been very little accountability to the Houses of the Oireachtas in terms of financial matters. All the big decisions have been taken outside parliamentary scrutiny to a very large extent and not just Seanad Éireann but Dáil Éireann are just a rubber stamp. We are not given responsibility.

On this subject, it is extraordinary, in the light of the way this country's finances have been mishandled, that constitutionally this House is not trusted with even sufficient money to print an advertisement. Time and again people on all sides of this House have had significant amendments ruled out of order because they would create a charge upon the Exchequer. In the light of the colossal sums involved in our current difficult situation, that is laughable.

I want to make a few comments on the national recovery plan. I have glanced through it, and it is full of the usual graphs, tables and rhetoric. How do we know it will work? We could not even get things right up to this point. This goes back a long way. I recall raising the fact statistics from the Department of Finance were routinely way off the mark. I recall asking what qualifications there were and how the figures were arrived at, and I did that partly because people outside this House were concerned. They asked me if I could find out the reason the forecasts were so often wide of the mark. Now we have seen situations where €7 billion becomes €15 billion inside a week or two.

One of the problems, and it may not be a problem the Minister of State and his colleagues will have to deal with for very much longer, and that may come as a relief, is a lack of confidence - a lack of belief. There is a psychological atmosphere in the country that is poisoned by fear, anxiety and uncertainty. I hope when this plan is fleshed out in a finance Bill it will give some degree of certainty. That is what is needed.

I want to examine some of the elements. First, there is the question of the markets. We are in danger of missing an opportunity to take a radical philosophical look at the basis of the western economic structure, not just in Ireland but throughout the west. I believe this is a systemic failure. It is not just bad behaviour. The system does not meet the situation.

I recall being told in this House on several occasions that we could not do this or that. We could not let Anglo Irish Bank collapse, which I recommended from the very beginning, because it was of systemic importance. Many people around the House referred to systemic. That word was repeated like some kind of a mantra but we must look underneath that to see what it means. It means, basically, that the system is more important than the welfare of the people. This is a moment when we should say "no". We should say that, collectively, as a responsible political class, as a Parliament and as a people, we are putting the rights and welfare of our citizens above the purported claims of the system.

With regard to the market, I predict confidently that these kind of catastrophic events will occur in closer conjunction, in more rapid succession and in more extreme form. This is not the end of it. We may just manage to get the sticking plaster on it in time to get us over this particular difficulty but it will recur unless we examine the entire system.

It is the same with climate change, and in my opinion the two are inter-related. There is not time, unfortunately, to go into that philosophically but it is perfectly obvious that western capitalism is based on a fairly crude interpretation of the market. It is based on the infinitely expanding market idea which meets a wall very quickly these days in terms of the finite resources of the planet, and therefore it is a contradiction. That will eventually have to be faced and we will have to revise the whole thing.

We have market sentiment and market confidence. How is confidence generated? How is confidence undermined? I would say much of what is going on is nothing other than a gigantic confidence trick.

Let us look at the banks. Basically, the banks are bust. We have shoved immeasurable quantities of money into them that are beyond the imagination of simple people like myself. We then went on and borrowed more money and shovelled it into the banks by the bucket load. Today we are told that because of German concerns about the rate of corporation tax the Government is prepared to introduce a levy on the banks. Perhaps the Minister of State can tell me what they intend to levy. Where is this levy coming from? It seems absurd.

It is rather like the little story that was going around about the American tourist who came into a little village hotel, plonked a €100 note on the counter and said he would like to inspect the rooms and he was leaving that money as a deposit. The owner of the hotel was delighted with that because he could pay his bill in the pub. The pub owner was knocking off the local tart and he was able to pay her. I am short-circuiting the story slightly. She was able to pay her room in the hotel. The American fellow then came back and took the €100.

It is very difficult to understand where the flaw in the logic is; it is just that money seems to go round. Nothing is actually paid but it circulates. The difficulty is that one person did not provide the service. That is the missing link in the chain, but that is the confidence trick and that is what has been going on.

Let us consider the ratings agencies because they are part of this whole set-up. Why do we not start rating the ratings agencies - Standard & Poor's, Fitch, Moody's and all those people? They are the people who got it wrong with Enron. They are the people who got it spectacularly wrong with Iceland to which they gave a three star rating a week before it went down the drain, so to speak. They are the very people who are giving us a triple star rating when we were doing all the sort of things that we are now being criminalised and criticised for. They did not spot it so why did they give us three stars? Why should we believe them now? Goldman Sachs and the rest of them were all up to their ears in helping the Greek Government massage its figures, and landed us in these waters. What are these ratings agencies which have been seen to be so incompetent and criminally corrupt with their involvement in sub-prime mortgages, and helping to conceal the toxic elements in those bundles and then validating them?

I used to teach in a university. The students would be thrilled to pieces if they believed they could buy their ratings, and that is what happened. Did they ever hear of a conflict of interest? Ratings agencies were being paid by the people they were rating. We should get rid of all this froth. Let us start rating the ratings agencies. That should be part of our price. I have been saying for two years that we in Europe should stand up to the ratings agencies and establish a fully independent trustworthy ratings agency and get rid of these people who have lost all credibility.

What about the hedge funds? These are the nice people who gamble against currencies in the hope they will collapse. They seem to have no feeling for the ordinary people on the ground. We should know a little bit more about them. I would like to know more about them. I got another requirement about which I am delighted. Let the people know what I am paid, what I do for my pay, the number of times I am in the place and so on. I am delighted because I believe my record will be pretty good, and it is all in the name of letting the people know.

How about letting the people know the names of the senior bond holders? Who are they? We have been asked to write a blank cheque for people we do not know with money we have not even borrowed yet. I would like to know who they are. Who are the people in the share funds? These are the people who are gambling against us. We should have their names. We should know who they are so we can rate them as well because it is an extraordinary position and people are entitled to that kind of information.

With regard to the banks, they showed a complete contempt for the small people who are their savers. The very least we expect from these documents is a reassurance for the ordinary people that their savings are intact. I said a long time ago in this House that the principal banks should be amalgamated and nationalised in one clean sweep, and Anglo Irish Bank let sink. I wish we had done that.

There is one way out of this, and perhaps the Minister of State will comment on this. We must punish those who gambled, those who got a higher rate of interest because of the risk involved. When that risk arrived, we insured them against it, indemnifying so they suffered not a jot. Why not do what David McWilliams has suggested and have a share for equity exchange and let them take the pain? That would get us off the hook; it would save €160 billion. The figures are unbelievable and I hope something of that sort will be tried. This is a moment when we should stand up to these financial institutions and ensure it is not just the little people once again who take the pain and that some of the big interests are forced to take the pain.

What has happened to moral hazard? Why are the rules of the market suspended in favour of the biggest financial interests? This is intolerable and unjustifiable. We can sell a measure of fairness and clarity to the people but cannot and should not sell muddle and unfairness, which seem to still rest at the heart of the financial system. I look forward to reviewing this when we have an opportunity to look at some of the details.

One of those details illustrates the difficulty we face: the €1 reduction in the minimum wage. That will hurt people, but this is precisely what was lobbied for by the restaurant industry, which needs it because it is in a bad situation. As often, it is a judgment call and at least something has been done. It will be difficult to defend against the mob.

I find it extraordinary that every second person in this country is now an economist. It took me a long time to get my head around any of these figures, and I do not understand some of them, but every second person knows the situation, knows the figures and can give a lecture on the circumstances. That is because there is no confidence; people are not leaving it to their "betters" to work these things out and it is a sad day to have to say that. I hope and trust we will get out of this situation. We will get out of it because of our creativity and imagination and without much help from the international banking system.