The Things You Think About After Your Bank Goes Bankrupt

Since I don’t follow the news, I sometimes come to things late. I am just reading up about how Sean Fitzpatrick, the godfather in charge of one of history’s worst banks, Anglo Irish, was found not guilty of illegal share dealing in the Dublin courts two weeks ago.

For those of you not in the know, Fitzpatrick became the chief executive of one of Ireland’s smaller banks, Anglo Irish, in 1986. When he retired to the position of chairman in 2005, it was world renowned as one of the most profitable banks in the world.

Very profitable banks should make you worried.

Anglo Irish, built on the adventurous bankrolling of speculative property deals went bankrupt in the aftermath of the 2008 financial crash. We won’t know for quite a while but it’s losses, absorbed by the Irish State, might be in the €60 billion territory.

In the summer of 2008, the then billionaire Sean Quinn found himself in a tight spot. He had taken a 29% stake in Anglo Irish bank. He had bought the shares when they were worth over €18 each. By the time June rolled around they were worth about €11. He had to reverse his trade, but doing so would release a third of the shares into the market, devastating the company Fitzpatrick loved so dearly. So he called his friends and took them out to golf. He invited ten of Anglo’s highest rolling customers to take out €30 million loans, with no commitment to repay and no collateral and use these funds to take the shares off Quinn’s hands. If the shares rose in value, they could claim the dividend. If the shares sunk in value, these buddies were not going to be held liable. The one critical thing was that shareholders were to be kept in the dark.

After all, people have a dreadful way of misunderstanding these sorts of things when they see it; they jump to think it is a tawdry, corrupt, illegal thing instead of friends looking out for friends. It’s community in action!

His defence rested on the fact that his knowledge of this bail-out was limited. Anglo was “Seanie’s Bank” during the good times, but now in the bad times it seems we are to believe he had the distant management style of a lofty absentee landlord. He never got his fingers dirty. Even over insane deals from which he directly benefited.

When they are winning, these Captains of Industry are heralded as geniuses. After their losses, it is amazing how the same visionaries are now rendered as passive, helpless, ignorant even. The contradictions of celebrity capitalists.

No one has a good grasp yet on the character of this man that has left such a dent in Irish society. But David McWilliams does recount an interesting interaction he had with him late one night at a UCD-alumni ball in November 2008. This was after it all went pear-shaped. The rumours on the street were that one of the two main banks, AIB or Bank of Ireland, would be drafted in to take over Anglo. (This was before we had come to terms with the fact that all the banks were rotten.) On the prospect of Bank of Ireland coming in, McWilliams claims this was Fitzpatrick’s response:

“No fucking Protestant is going to take my bank. No fucking Protestant is coming near us. Those establishment fuckers and Bank of Ireland have been running our country before we came along and those fuckers are not going to bring me down. None of them are ever going to look down on us again. We are the outsiders and this is our moment and those fuckers don’t own us anymore.”

A few weeks ago I argued here that sectarianism in Ireland is a form of racism that pollutes the church and the society. While all we have is McWilliams’ side of the conversation, there seems to be something alarmingly fitting and truthful about this story. When pushed into the corner by his own reckless greed, a billionaire who arguably did more to harm Irish people than any “Brit” or any “Prod” alive today finds himself spouting hellish bile about Irish Protestants, who after all are his neighbours, his golf-buddies, his colleagues.

I doubt he’ll ever agree to an interview with me for my thesis now. But then again, I’m a “fucking Protestant” just waiting to own him.

Your Correspondent, Will content himself with owning Seanie’s debt

The Freedom of a Christian Ethicist Conference

With a stellar line up including Stanley Hauerwas, Michael Banner of Cambridge, Jennifer Herdt from Yale, Gerald McKenny from Notre Dame and some chap called Brian Brock, the department I am a part of here at Aberdeen, Christian Ethics, has arranged a pretty astonishing conference for October of this year. I heartily recommend that you consider coming to grey Aberdeen for illumination!

Theological Ethics Conference Aberdeen

The conference website is here, you can find all the relevant details and booking info there. Places are limited to a 100, so don’t get left out.

Your Correspondent, Has many ways to distract the gate-crashers

“Yeah, but what’s your alternative?”

This is a question I invariably get asked when I talk to Christians about my thesis.

When you asked me that question, I internally rolled my eyes.

Occupy

It isn’t that the question doesn’t matter. Of course, I want to develop practices that allow us to root out the ways we trust Mammon instead of YHWH. But the question is always front-loaded in the conversation because we trust Mammon instead of YHWH. After all, one of the ways we can see how Mammon works on us is our almost metaphysical assumption that reality will provide us with alternatives. If Coke isn’t our thing, there’s Pepsi. If Kia don’t do the job, there’s Hyundai. And if capitalism is awry, then we are trained by capitalism to expect an alternative. That training means that when an alternative isn’t provided, you are not being serviced and you can take your attention on to someone who values it more appropriately. Gladly, capitalism and the marketplace are not reality (even though they are both very real) and in reality it is sufficient to make a diagnosis (the way we have constructed our economies do not match with the Kingdom of God) without being able to offer a cure.

Only in the absurdity of late-Capitalism does the cure precede the diagnosis, such as when pharmaceutical companies synthesize the drug and then have to invent the disease it treats.

Maybe the best we can hope for right now is that we can diagnose what is wrong with the market and yet still be forced to live within it. This would require a patience that Capitalism cannot easily turn to profit. But naming the wrongness we live within also sets on us a course to name other things properly and thus, to free ourselves from our deceptions. Capitalism makes jobs, we say. Apart from all the housing estates where it doesn’t. Capitalism is the machine of innovation, we say. Ignoring whether the things we “innovate” are worth anything except profit. Capitalism serves justice, we say. But whose justice is it serving?

Capitalism is not inevitable. Neither is it fit for purpose. Capitalism must change or die or be killed and one of those things will happen. The internal contradictions (a fancy way of saying the dark corners where nothing makes sense and great harm is done) are too great. It will pull itself apart or be torn asunder trying to keep itself together. What’s the alternative? It’s the same it has always been. Acting justly, loving mercy and walking humbly with our God.

Your Correspondent, Remembers that revenge is profitable but gratitude is expensive.

How Fast We Built Houses in Ireland

I find it difficult to even comprehend the scale of the property bubble in Ireland. For the sake of putting it somewhere, here is one way I try to think about it. This is not an original way, but the numbers are appropriately shocking.

On page 43 of the Annual Housing Statistics Bulletin published by the Irish Department for Environment, Heritage and Local Government, we find listed the completion rates for new houses from 2004 to 2008. With some basic sums we find that over five year period, Ireland built, on average, 76,216 new houses.

In Live Table 209 (Permanent dwellings completed, by tenure and country), published by the British Department for Communities and Local Government we find that in the same period in England, on average there were 159,714 new builds, annually.

So in the period when the bubble really grew, Ireland built almost half as many houses as England (47.7%).

But Ireland’s population is about 4.5 million and England’s is about 63 million. 4.5 is not 47% of 63.

England’s economy was also growing at this time. England’s property market was also over-heated at this time. And yet proportionately, Ireland was building 7 times more houses than their close neighbour.

That, my friends, is a world-beating property boom.

Your Correspondent, He lived in a house, a very big house in the country

How Much Is Money Worth?

Writing in 1966, as a “young, white, Anglo-Saxon, Episcopalian, Harvard attorney”, William Stringfellow proposes that the issue of Christians and money has been settled for us for a great number of centuries now. He writes:

Jesus admonished the rich young man who sought justification to dispose of what he had and give it to the poor and thereby follow Christ. Is that warning now forgotten?
Jesus purified the temple when it had become a haven for thieves. Is that no precedent for the Church?
Jesus was nursed in a shed, did not follow the occupation of his father Joseph but became an itinerant, had no place to sleep, sought out the poor and disadvantaged, and blessed them many times and in many ways. He was seldom welcomed among the affluent; by all accounts He was poor Himself in every worldly sense, and declared that money belongs to Caesar. Where the Church and the people of the Church forsake His poverty, is not Christ thereby foresworn?
Although money and the property which money begets accomplishes, in America, fabulous and terrifying feats, no camel has yet passed through the eye of a needle.
After all, the price, in money, of the life of Christ was thirty coins.

– William Stringfellow, Dissenter in a Great Society, 35.

How much is money worth? Judging from the price paid for God, it is over-valued.

What does the marketplace tell you to do when your asset is over-valued?

Your Correspondent, Goes to sell everything, but giving the proceeds to Apple

Sins Of The Father

I have spent the Autumn reading newspaper articles, journal pieces and books about the history of the Irish economy. I still don’t quite know what to make of it all, but since I am due to submit some fantastic piece of work to my supervisor by Friday week, I better start deciding.

One of the most ambitious books I have read is Sins of the Father by Conor McCabe. As my little brother reminded me, McCabe is not properly an economist. He works in a School of Justice, which is a concept economists rarely find lucrative! But his argument is a pretty interesting one. He argues that the Irish economy has been shaped by the sectional interests of beef barons, property developers and bankers. Much of the prosperity we have experienced has been the end result of the curiously unproductive things we did in these three areas and how they colluded with political power to make Ireland an excellent place to hide profits.

So as you can imagine, this is not like the first book I read, written by a former Minister for Finance.

I suspect that for many economists, the synthetic and discursive account that McCabe offers would barely meet the standard of argument. And in that sense, my little brother’s reminder that economics is not just things people say about the economy but a specific and highly developed mode of discourse is a wise one. It is no slight to McCabe or to Tom Garvin or Denis O’Hearn or any of the other social scientists who have analysed the Irish economy to declare that these works are not economics.

But one thing that McCabe definitely doesn’t think he is doing is theology. He says so himself towards the end of his argument:

It seems bizarre to have to point this out but the crisis was not a theological one; it was of an economic social system and the position that Ireland’s comprador [middle-man] class have carved for themselves within that system.

Keen readers will note the non sequitur. On what understanding of theology is a crisis grounded in the distorted shape of an economic social system not theological?

But then immediately McCabe goes on to make what is most certainly a theological judgement:

There are no moral bankers within capitalism, only those who return a profit and those who do not.

It’s pretty shoddy theology at that. It is a firedoor theology; where “capitalism” is a thing so real that it blocks out any hope of being moral, where profits and ethics are hermetically sealed off from each other.

McCabe’s book is hugely helpful as a way into the development of Irish society that concerns itself with the economy without imagining economics to be the driving force. But it is also hugely helpful as a reminder of just how incoherent we are when it comes to deciding what is of worth.

Your Correspondent, Whatever way you cut it, mutual benefit is a moral category

Everything I Know About Writing A Theology PhD Thesis

    1. Gather together a few vague instruments that look like they could be interesting.

    2. With a sort of do-it-yourself gumption, bash them together to see what sort of noises they make.

    3. If it goes wrong, just delete it and start again.

    4. With the help of people engaged in the same sort of thing, you get a rhythm built up.

    5. Follow the melody where it takes you.

    6. You know you are almost finished when, finally, as you read what you’ve been doing it moves you to tap your foot, shake your booty and eventually actually go out into the world to love God by caring for people.

It probably doesn’t predict success when one’s theological method is an adaptation of a Tune-Yards performance on YouTube:

Your Correspondent, Confident and yipping at the heels of my yuppie teachers