The Taoiseach is wrong to praise Charles Haughey's management of the economy, writes Pat Rabbitte
Touching though it is to hear the Taoiseach's attempt, in a series of recent interviews, to assist the rehabilitation of his mentor, Charles Haughey, he should really have chosen a different basis for doing so. Focusing on Haughey's record of economic management will not, in any objective analysis, cast his former boss in a favourable light.
Bertie Ahern was anxious to focus on how the public finances were restored under Haughey's direction in 1987-89. What he ignored was Haughey's own direct role in getting us all into that mess in the first place.
Indeed, while the internecine warfare within Fianna Fáil portrayed in the recent Haughey series made for good TV, it came with a heavy cost attached for the thousands of Irish families affected by unemployment and emigration during the 1980s.
Ireland's problem with government deficits began in the mid-1970s, when, in common with other European countries, public deficits increased in response to the first oil shock.
Between 1975 and 1977, however, the Fine Gael/Labour coalition reduced the deficit by 6 per cent of GNP - a massive fiscal correction in only two years.
Then came the infamous 1977 manifesto, and Fianna Fáil's attempt, under Jack Lynch's leadership, both to buy the general election (which it did) and to reduce unemployment through fiscally stimulating the economy. This latter policy was a disastrous failure.
While Haughey publicly supported the 1977 manifesto, he was said to have little time for the policies being pursued by Lynch and his minister for economic development, Martin O'Donoghue.
Then came the famous television address to the nation, telling us that "as a community we are living away beyond our means". Haughey wasn't wrong about this, but he simply did nothing about it.
Far from tackle the problem, he added to it in spades. To a contemporary audience, the figures involved are staggering. Haughey was in charge of the Irish economy for all of 1980 and about half of 1981.
Yet, despite an emergency budget introduced midway through 1981 by Fine Gael and Labour, government spending increased by 9.7 per cent of GNP in only two years. The Exchequer borrowing requirement rose to 15.7 per cent of GNP.
Even more striking was the near complete breakdown in the system of budgetary management. In 1979, under Lynch, actual public expenditure exceeded planned expenditure by 81 per cent. In 1980 the figure was 58 per cent and in 1981 it was 63 per cent.
While the Lynch wing of Fianna Fáil is culpable for the development of this problem, Haughey did not resolve it.
The reason for this failure was political. During the first Haughey government of 1980-81 Fianna Fáil was sharply divided. Haughey had won the leadership of his party by 44 votes to 38. Since he had effectively staged a coup against Lynch's leadership, his opponents felt entitled to do the same to him if the opportunity arose. There was even the suggestion that his opponents within Fianna Fáil sought to have a veto over sensitive cabinet appointments. In this atmosphere, Haughey desperately needed a "mandate of his own". Without an electoral victory in his own right, he would be vulnerable to being removed from the leadership, as evidenced by the subsequent "heaves". This made it nearly impossible for him to take the hard decisions necessary to address the fiscal crisis.
It is paradoxical that Charlie McCreevy now claims that his opposition to Haughey was based on the latter's poor economic management, since that poor management was in some measure the result of internal strife within Fianna Fáil.
Haughey's hunger for power, therefore, was a direct cause of the fiscal crisis which beset the Irish economy for much of the 1980s. Nor did Haughey do anything to make its resolution easier when he was in opposition.
That the problem was resolved in the late 1980s, at a considerable cost to "the old, the sick and the handicapped" so vividly described in Fianna Fáil's 1987 election material, was due to many factors, including the development of social partnership.
By that time, of course, Haughey's internal opponents, many of whom had contributed more than a little to the economic crisis, had either made their peace or parted company and joined the PDs.
Interestingly, whether they stayed in Fianna Fáil like McCreevy or Séamus Brennan, or moved to the PDs like O'Donoghue and Des O'Malley, many of Haughey's internal opponents became adherents of PD philosophy. Therein lies another negative in terms of his contribution to the Irish economy.
Throughout that period of belt-tightening, unemployment and emigration, a culture of massive tax evasion prevailed, and the man himself continued to live like a prince in Kinsealy on other people's money. It would appear that all of this passed over the head of the present Taoiseach, while, as he once told RTÉ, he was "taking the minutes".
Pat Rabbitte is Labour Party leader