QUOTE
The Irish debt crisis is a direct result of criminality in the banking sector. While it is clear that the government could have taken a different decision (c/f Iceland) the decision to nationalise the banks was not made on principle: it was a response to that criminality and the consquent impossibility of dealing with the situation through government guarantees or recapitalisation by issuing bonds and assuming the debt in a repurchase scheme a la Chile. There was nobody left within the banks who could be trusted to manage any such scheme, even with close scrutiny. But the level of the liabilities was not known, and have proved to be far greater than first suspected.
I discussed the Irish crisis upthread and said that. In the last couple of days some tapes have been leaked which record conversations between executives of the Anglo Irish Bank in 2008 when the bail out of the Irish banks were underway. As comes as no suprise, those executives were laughing at those who were bailing them out.
http://www.guardian.co.uk/business/2013/ju...k-tapes-bailoutWhat is interesting is that the tapes have been in the possession of the Irish police for 4 years, and yet have not led to much in the way of action and have not been made public before now.
What is also quite astonishing is that the Taoiseach, Enda Kenny, has said that this damages the reputation of the Irish state and jeopardises any further help from the EU (which is likely to be necessary if the austerity measures imposed continue to be implemented), which may be a blessing, though that is a separate issue.
Once again we see a familiar pattern. Criminal or reckless behaviour by the banks is "socialised" and the state and the people take the blame and the pain. This aspect is not debt, directly: it is reputation. It matters, and it is just as illogical to hang it on the state as it is to allow the debt to "migrate" and then blame the state for high debt/deficit.
