Roll up! Roll up! See the freak show that is the Irish banking crisis

One of the most startling films of all time must be the 1932 production “Freaks!”, a film that was forgotten for many years but since being re-discovered in the 1960s has grown in stature, much like two of my other favourites “The Shootist” and “What a wonderful life”. The film “Freaks!” was shocking but the storyline itself was straightforward – two normally-bodied unmarried couples live in a travelling circus that includes a freak show of differently-bodied people. The plot is that one of the unmarried couples conspire to marry one of the small people, then poison him and steal an inheritance. That couple famously is revolted by the physical difference of the “freaks” and during a sham wedding between one half of the couple and a small person, the “freaks” famously sing the chant “Gobble! Gobble! One of us! One of us!” and the couple can’t help but show their repugnance at those differently-bodied. The plot to poison her new groom is discovered by the “freaks” and in the film’s climax the freaks castrate the male half and permanently disable the female half of the couple that tried to kill their comrade. The other normally-bodied couple in the film serve to show acceptance and matter-of-factness with the differently-bodied – after all if it weren’t for an accident of birth we might ourselves be differently-bodied. The film is perhaps best known today for its portrayal of real “freaks” – the movie has real-life Siamese twins, a man with neither arms or legs, various small people, a hermaphrodite and others with various differences, some of which rendered them mentally retarded (if that is the correct term) which was particularly controversial.

So there’s the introduction on which to hang our own story of becoming freaks. As our 10-year government bond rate heads inexorably back towards territory last seen back in January 2009 when Anglo was nationalised amidst concern over the spiralling and uncertain cost of bailing out that bank together with slow progress in bringing down the deficit in running the country day-to-day, it seems as if we are attracting the world’s gaze and the tone of the reporting is changing as we ourselves are now regarded as a freak show (wasn’t it grand in the good old days to be simply PIGS).

However politically incorrect though, freaks are intriguing and it is fascinating to gawk at someone’s physical difference thanking the accident of birth that you’re in the audience and not the show. And yet we are the show. The cost of our banking bailout is being put between €29-90bn*. The latest estimate of the cost of rescuing the American financial system is $89bn (or €74bn). So the cost here is certainly in the same ballpark as the American rescue and if you reduce the comparison to a per capita basis then we can wave goodbye to the ballpark as we become 21^st century economic freaks.

And in recent weeks we have had the attention of the world’s media the Financial Times, the Wall Street Journal, the Economist, Bloomberg, Reuters, the BBC, NBC, CBS, the Guardian, Der Spiegel. Everyone wants to get a gawp at the freaks.

And to an extent there is the karma of us strutting about the place in the early 2000s pointing at the per capita GDP figures between our legs, the satisfaction of the auld enemy emigrating to Ireland for construction work and who will forget the abuse of the blanket guarantee in September 2008 when some tried to tempt funds from non-guaranteed banks throughout Europe. So we can probably expect a degree of finger pointing now.

But there’s another great movie about the differently-bodied, the Elephant Man, a film based on the life of Victorian Joseph Merrick. And perhaps the most memorable line from the film (and indeed any film) is John Merrick being cornered by the gawkers and straight from his soul he yells out “I am not an animal, I am a human being!”. And I think we are getting to that point here. The article in the Economist this week features a photograph of what looks like the bones of a fine house with overgrown grass around it and a couple of nags (definitely not from the Coolmore Stud!) together with the byline “All that’s missing is a pint of Guinness!” Hasn’t the time come to stand up and tell the world we are human beings?

Of course whilst there remains general uncertainty about the true costs of our crisis, we will attract interest from the serious media as well as the rubber-neckers. And we do need to place a sufficient degree of certainty on the cost of the crisis and stop the Chinese torture drip-drip of a billion here, five billion there approach to the crisis. We also need to meaningfully confront the only and ballooning deficit. We also need to harness some of the skills that saw a global expansion by Irish developers in the last 15 years. Although there is something of the chancer with some brown envelopes to bribe officialdom around the image of developers, there is also in reality an abundance of contacts, skills and experience. NAMA is of course heavily regulated but it seems a waste that the nation will not benefit from the recovering property markets throughout the globe. NAMA is bashing heads together and marrying together the most unlikely of partners. Is there not the potential to build a private satellite of NAMA to take advantage of the skills, and perhaps something to carry us beyond NAMA’s life span. We need initiatives and action. I, for one, am getting fed up with being pointed at.

* The costs of rescuing the Irish banking system.

Official position: Anglo CEO Mike Aynsley said yesterday that the net cost of the new Anglo configuration was €25-28.5bn. Central Bank governor, Patrick Honohan said in August in Beijing that the cost of “what is mainly a small building society” was €4bn. NAMA’s central projection is that generates a “net present value” of €1bn.

Standard and Poor’s place the cost at upto €90bn made up of €45-50bn as the cost of bailing out the banks and €40bn for NAMA.

My own view (for the little that it’s worth) is that Anglo will cost €35bn net, INBS will cost €5bn, EBS will cost a rounded €1bn and AIB will effectively cost €2bn. It’s too early to say on NAMA. So my total would be near the €43bn mark excluding NAMA.

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