Cowen has failed leadership test

At this stage we have seen enough of Brian Cowen's handling of the current crisis to make a call on his leadership skills. Unfortunately for him, but more to the point for us, he has failed quite miserably.

Cowen got off to a wobbly start. After he became Taoiseach, he immediately faced the Lisbon vote. He took an immediate political hit when the referendum proposal failed. It could be argued that Cowen's Lisbon campaign was already badly compromised by Bertie's long good bye and endless tribunal appearances. So Cowen perhaps got the benefit of the doubt. In any case, Cowen was still walking tall after the incredibly turn around in the Fianna Fáil election campaign in 2007 which he is largely credited for. (The campaign looked like it was going to implode over anomalies in Bertie's evidence, but Cowen was senior among those who grabbed the campaign - and Bertie - by the scruff of the neck and hauled it back on track).

It is often said that Cowen's first act was to reshuffle the cabinet and that even there he lacked imagination. That is true - his choice of Tánaiste in particular was astounding and is bound to keep on hurting him. But even so, it could hardly be said that Cowen picked a few dummies for the top jobs from a sea of talent! In reality, he had slim pickings.

When the financial and economic crisis struck, however, Cowen seemed unable to get the measure of it. He seemed cast onto the angry waves and for the most part since has come across as completely adrift. As the crisis deepened, he and his government continued to underestimate the depth of Ireland's financial and economic troubles. It is true that the financial collapse was not their doing and took the international community by surprise. Lenihan, like everyone else had to engage in - and is still in the thick of - a fire fight. But the economic and fiscal crisis is different: that should have been seen earlier.

More to the point: it was seen earlier. Even in July the government saw fit to have the mini-budget. But Cowen set us on a course then which would see the same mistake repeated: doing too little too late.

It is not clear to me whether Cowen was in denial until recently about the extent of he problem in the economy or if he simply lacked the courage and nature to rise to the occasion by taking very bold steps early. In any case, nothing he has done has signalled that he is in command.

Cowen has not shown some of the essential traits of a leader who can take his people through a deep crisis. The first issue, as I mentioned, was that he didn't seem capable of quickly comprehending the nature of the crunch. Great leaders have a sixth sense, a sharp acumen that allows them to feel the nature of the crisis as or before it happens. No so for Cowen. If there was one person in Ireland who should have known that our tax base was chronically unbalanced for a property shock it should have been the man who had just spent three years in charge of finance.

Cowen also fails another test. When he finally did see the crisis for what it was, he lacked the depth to draw up a strategy. When the figures pointed Cowen towards the abyss, he shrunk. He may have felt intimidated by the sheer extent of the problem, or he may have been unable to get the measure of it. Either way, he has not given the impression he is drafting a grand strategy that, while flexible in terms of tactics because circumstances will change, charts a plausible course towards recovery.

There is probably a good reason why Cowen has not come up with such a strategy. In order to think about the kind of things that will get us through the crisis, we need to think about what kind of country we want afterward. That will require a dramatic re-alignment of Irish fiscal life, and Cowen is among those who lead us into the terrible place we are now. He was also in the cabinet which saw Charlie McCreevy devastate our tax base and prime pump the property bubble. Cowen would now need the courage to turn his back on that legacy and call a (hole digging) spade a spade.

On another crucial level Cowen has failed: communication. He simply hasn't been present. Perhaps bereft of a strategy he feels he has nothing to say directly to the people. But that is probably not the reason. He can talk with passion about pulling together and taking action, even if he lacks a plan. Yet he doesn't address the nation. When he talk at all it only happens by chance as it were - at a talk with the Dublin chamber of commerce or the like. He should take a leaf out of Roosevelt's book. Franklin D Roosevelt took over in the Great Depression. Apart from being obsessed about discovering the causes and generating a grand strategy, Roosevelt was determined to make it clear to people what was required and what he was planning to do. In his famous radio broadcasts, called "fireside chats", he spoke directly to the nation about how the process was developing. It is clear that Obama too speaks directly to his people. Cowen however, is only seen bickering in the Dáil or on the steps of some conference when he runs into the press. He needs to be out front in a crisis like this.

And finally Cowen falls on another hurdle. He doesn't display a great sense of political acumen: he completely misread the way the budget would be received, and his credibility was repeatedly damaged by a series of rollbacks such as the over 70s. On the recent levy again he failed to read the anger and failed to ensure that the cut would be equitable. He also failed to give a sense of leadership by example.

Cowen could have made great gains in terms of support if he had made some radical announcements, perhaps cutting the number of junior ministers, deeper cuts in TD and ministerial salaries, a direct promise to the people that we would pursue all wrong doing or illegal acts in the banks and build a world class culture of corporate governance (he left this to the Greens to say, why?), he could have announced in parallel with the public sector levy that, while the commission in taxation has not yet finished, the government promises to rebalance the whole tax base, and he could have said that during the celtic tiger we strayed off the path in terms of equality and fairness and that for the lower paid, any gains were ephemeral, but that now we will start afresh and create a fair society. But Cowen could never bring himself to say that.

He left those grand statements to others, such as Eamon Gilmore, who has scored exceptionally well in the latest poll while Cowen flounders. No, definitely not rising to the occasion Mr Cowen; not the leader we need now in a time of crisis.

Lenihan: Doing OK?

So how is Lenihan doing? I was amused by the phrase that went round when Lenihan was first appointed to Finance by Cowen : "we is very intelligent". It made me laugh. Was he really? How do we know? And doesn't it saw something about the caliber of our senior public representatives that having a brain would make one of them stand out. Anyway, there is no way of measuring intelligence that would adequately capture the skills necessary for being a good minister - smart yes, but also courageous and possessing sound judgement and an ability to lead and, nowadays, communicate.
Here now in the middle of the storm, everyone is shouting about Lenihan's shortcomings. He didn't capitalise first off; he didn't wind up Anglo; he didn't fold the two big banks into one good big bank and dump the bad loans in a financial landfill. But actually, must of the commentary is just people letting off steam (the remainder is mainly just political game playing). People are frustrated because they still expect some kind of quick fix or rapid conclusion. The nation hasn't settled into the reality yet that the Irish economy is small raft which has just entered a long canyon with a series of rapids along its length. We don't know how long the canyon is, nor how many rapids there are, and we have no idea whether a little raft like ours can make it to the end without overturning.
In general there has been little effort to understand the situation in which Lenihan finds himself. He is not a financial expert and even if he were, it wouldn't guarantee success for we have entered completely unknown territory. Lenihan is faced with a set of circumstances which are rapidly changing and for which there is no agreed or known formula for making things better. Even the most powerful nations have been badly shaken by the global crisis and are to a large degree are making it up as we go along. How could any Irish minister expect to be any different?
True, we can disagree about specific measures : the distribution of taxes or the percentage of board members which should be replaced, but in general there is no over arching template which will lead us to safety.
We do need an opposition now - for all measures taken now need careful scrutiny. But the general public should also scrutinise the scrutiny. It is very easy for Richard Bruton for example to list off what the minister is doing wrong. "it's very simple" said Bruton "we need to set up a new bank with a clean balance sheet". But no actually it's not that simple. This route has not yet been chosen by any other country. It is by no means tried and tested. It may carry considerable risk. For example, much of the present banks function perfectly well - they have systemic knowledge of the Irish economy, they know Irish customers, they use methods which have been honed for years, they have division which functions well. It seems reasonable to me to try to resuscitate them. Yes, we need immediate changes of personnel, and medium term we need to build a brand new regulatory framework and to try to create a new banking culture. But much of this will take time and considerable thought, debate and agreement in order to make it work.
Overall, I think Lenihan has tried pretty hard and as proved agile and courageous when necessary. He also comes across as quite commanding and determined. And I would be tempted to give him the benefit of the doubt. That is to say, I would see no prospect of better performance by any of his potential replacements, from within FF or without. ( By the way, this is not the same as saying I would be opposed to a change of government. I think that while Lenihan deserves a certain understanding, FF senior ranks and its power fattened, arrogant culture, is way out of touch and there needs to be a far broader rebalancing in society between the very wealthy, the merely well off, and the ordinary working people).
True, Lenihan should have read the entirety of the report that mentioned the IL&P loans. It was a mistake not to have done so. But I'm not convinced it meant that he wasn't taking the whole Anglo thing seriously nor that he wasn't dedicated to getting past that particular hurdle. But everyone makes a mistake and that one wasn't catastrophic. With our without that revelation Anglo was a basket case. But of course Lenihan cannot get away with many similar errors. He will have to be hyper diligent now.
Nevertheless, I think it is far too easy to say what Lenihan should do and what he shouldn't. For every second day he has to take (and has taken) enormous decisions which will affect this country for a long time. And there is no easy way. As economist Dan O'Brien said the other night "this is a process". And it is unprecedented and so it is like fire fighting. It's about keeping going and there are no easy answers.