The Quiet Road

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A minor observation about the current chaos in Irish political and financial circles. The opposition parties; specifically Fine Gael and Labour; are demanding an immediate general election. The government insists that it needs to hang on for another month or two in order to pass the budget measures required to secure the IMF / EU bailout. To this, the opposition parties respond with indignant bluster but little else. They profess outrage at Fianna Fáil hanging on to power. They portray it as a denial of the electorate’s right to be heard on this uniquely important issue. And they promise to vote against the budget from a minority position.

Fine Gael and Labour are engaged in the politics of cowardice and dishonesty. They are cowering beneath the onslaught of the IMF, using Fianna Fáil and The Greens as increasingly fragile barricades. Let’s be 100% clear about this… if either party really wanted to trigger an instant election, they could do so at the drop of a hat. Fact is, they don’t have an alternative plan and are completely devoid of ideas and vision. These parties — our next government if polls are to be believed — are desperate for Fianna Fáil to sell us out to the IMF and absolve them from responsibility for the shitstorm being visited upon us by The Markets. If there were an election before the budget they’d be exposed as charlatans, forced to tread the same weary path as the current discredited lot. Ideologically incapable of considering radical alternatives.

And make no mistake, they could trigger an election. All it would take would be for Enda Kenny (Fine Gael) and Eamon Gilmore (Labour) to call a Press Conference and announce that they will not be bound by the impending Fianna Fáil four year plan and budget. Pledge to revisit both immediately after the next election. It would pull the rug out from under Cowen and force him to hold an election as soon as possible.

But Kenny and Gilmore are unwilling to force the issue. They’re hiding in their minority position. Condemning the actions of the government while steadfastly refusing to intervene, despite having the means to do so. They’ll watch as Fianna Fáil kick the crap out of the poor then take office and lament. All the while complaining about their hands being tied. About how they don’t have the power to change things.

Bullshit. They do have the power, they don’t have the wit. And so, they will watch this country get bled dry.

The European Banks gave out billions in loans to the Irish banks. The Irish banks were badly run, lost all the money and are functionally bankrupt. So the IMF is now insisting that the Irish taxpayer borrows the equivalent amount (from those same institutions!) and bails out the Irish banks with it. Then the Irish banks will pay back the loans they took from the European Banks. Leaving just the newly imposed Irish sovereign debt to the European banks remaining. To add insult to injury, the imposed loan is at a far higher interest rate than most of the original bad loans were.

Still angry and getting angrier about all this. This monstrous nationalisation of private debt shouldn’t be permitted. It is fundamentally unjust and the system that demands it is corrupt and immoral. There’ll be a march in Dublin this Saturday (click the image above for more details). It’s being organised by ICTU (the Irish Congress of Trade Unions) but is completely non-aligned and aims to give voice to public discontent rather than being a message specifically from the Unions. I urge my Irish readers to attend.

And I urge my overseas readers to take note. Because what’s happening in Ireland is the new face of international finance capital, and it’s not stopping with us.

All a bit surreal over here at the moment. It’s one of the very rare occasions where rolling news isn’t repetitive… everything’s changing so quickly, almost by the hour. Seems as though Ireland, with 1% of the population has managed to generate over 10% of Europe’s total debt. A little excessive. We’ve got a 4 year plan, a looming budget, and ever more grim prognostications. So the men from the IMF are stalking the halls of power, wielding arched-eyebrows and briefcases. “The Irish need supervision”, is the message. “Someone’s got to put an end to our profligate ways.”

But it’s a false narrative. I’ve already lambasted the Irish property developers, bankers and politicians for their part in our downfall, but it’s worth remembering that they were a symptom of a widespread disease. Ireland’s crime is to have been the most enthusiastic proponent of a global obsession. We embraced the delusion a little tighter than others. But it was a shared delusion, make no mistake, and it certainly didn’t originate here. That debt we’ve run up? It’s in Euros. It’s not like we were printing our own money all this time. The European Central Bank (ECB), along with a couple of UK banks, were funding all this madness. Irish bankers were meeting with their European counterparts and saying things like, “You know how property bubbles usually burst? Well we’ve got one over in Ireland that never ever will. Seriously, it’s going to expand forever.” And their European counterparts would say things like “Finally! We’ve been looking for one of those for ages! Mind if I chuck in a few billion?”

The sudden arrival of these serious looking men from international institutions onto our streets and televisions isn’t because they’re worried Anglo-Irish Bank might go out of business. Or rather, that fact in itself doesn’t worry them. No, it’s the damage they’ll suffer should it occur which has drawn them to our shores. Be under no illusions here, the job of these men — and the Irish government that is aiding and abetting them — is to legally bind Ireland to the debts they incurred. They made a reckless bet on a 100/1 shot, and are now demanding the horse’s owner absorb the losses. It’s a nonsense. But it’s a dangerous nonsense.

We really should have gone the route of Iceland and let the chips fall where they may. We should have defaulted. We should have calmly announced that a bunch of financial instutions making insane bets with one another had bugger all to do with the Irish public. Consequently the Irish public won’t be paying for it, thanks very much.

But we didn’t go down that route. And we didn’t because the people making decisions for us now are the same we people we elected to prevent this happening in the first place. If there’s one job of government more important than almost any other, it’s to ensure the country doesn’t go broke on your watch. Fail at that, and surely you forfeit the right to make further decisions on behalf of the nation. Certainly the moral legitimacy of those decisions must get called into question.

But even if this gross act of piracy wasn’t morally indefensible, I’d question its consitutionality. Not that I’m a constitutional expert, and I suspect my interpretation might be broader than most, but it seems to me that recent government decisions have brought it into conflict with the very first Article of the Consitution…

The Irish nation hereby affirms its inalienable, indefeasible, and sovereign right to choose its own form of Government, to determine its relations with other nations, and to develop its life, political, economic and cultural, in accordance with its own genius and traditions.

I love the word “genius” in that sentence (I like to imagine it was a ‘2am decision’ that got it included in the final text).

I think there’s definitely a case to be made that the current Irish government are radically curtailing Ireland’s sovereignty over its economic life. And when the government wants to do something unconstitutional, they need to hold a referendum first. Are there any constitutional experts out there who can tell me whether that’d be the basis of a realistic court challenge?

Don’t get me wrong, we have a large budget deficit and that’s definitely our problem, and we need to deal with it. But it’s far from an insurmountable problem and it certainly doesn’t warrant having the IMF beam in. We have a balance of trade surplus and we are arguably one of the few potentially self-sufficient nations in Europe… we can feed, house and clothe ourselves and still make an income from foreign trade. So the fundamental ability of Ireland to survive isn’t at issue here. What’s at issue, and the only reason the IMF are here, is the bank debt. And that’s their problem. Punishing the Irish workforce, and the hundreds of thousands now out of work, the Irish pensioner, patient and pupil. It’s fundamentally unjust.

And it’s not made any better by a media coverage that constantly uses words like “humiliation” and “shame”. We’re so bloody Catholic, I tell you. The Taoiseach is forever being asked how much “personal shame” he feels over this. It’s important stuff to us here. The names of great Irish heroes of the past have been invoked. Collins, Pearse, Connolly… was it for this they died? And de Valera is surely turning in his grave.

One thing I’ve found fascinating though, from a cultural perspective, is just how much this crisis has highlighted the disgrace into which the Catholic clergy have fallen in this country. If this economic collapse had happened even just 20 years ago, the voice of The Church would be one of the most influential in framing the entire narrative. And with a bitter irony for those of us who condemned the level of Church influence over Irish society, they’d almost certainly have been on the right side of the argument on this particular issue… opposing the stringent cuts to welfare, the minimum wage, health and education that loom large in our future. And they’d have been a powerful voice in favour of raising taxes on the highest earners — quelling some of the opposition that such a move would face.

But today the Church is nowhere to be seen, though our Catholic obsession with shame and guilt remain. The endless panel shows are devoid of men of the cloth.

Perversely, there’s a part of me that thinks this process might be a good thing for the country in the long term. With resource depletion going to hit the global economy like a freight train in a few short years*, it might not be a bad idea to get a bit of a head-start with the powerdown (do our initial stumbling while there’s still a semblance of an international safety net to help us avoid serious injury). It’s hard to know though. Maybe going down first just means the rest will fall on top of us…

So yes, all a bit surreal over here. Just this morning the government collapsed. And that might not be the biggest news story of the day. There’s hours to go yet.

At the start of the year I wrote a short blog post entitled “2010: A year of global famine?” In it I linked to an agricultural analyst who suggested that crop yields were down across the globe in 2009 and would continue to fall in 2010. He suggested that we were facing global food shortages.

Today a comment was added to the post by Frank Maloney. I started to respond on that thread, but my comment grew to the point where it merited a post of its own. And here it is!

How’s that whole global food shortage for 2010 working out? Everyone just about exhausted their emergency supply of MRE’s?

The only thing that causes food shortages in modern societies is politics. Look at Ethiopia which has always been a poster child for famine, despite the poverty, cycle of droughts and hunger the region is producing and exporting huge surpluses of food on private farms owned by mid east governments.

— Frank Maloney

Let me start by saying that the fact food shortages in 2010 weren’t as bad as were feared should be a cause for celebration rather than triumphalism and internet point-scoring. I’m very happy that predictions of global famine in 2010 were wrong. The predictions of worldwide food security issues for this year were shared by the United Nations World Food Programme (UNWFP) and I suspect they are also very happy to discover that their worst fears were not realised.

That said, I fear we risk a dangerous complacency if we simply dismiss the issue because the worst case scenario for a single year failed to materialise. We should be happy that less people found themselves suffering food shortages in 2010 than had been expected by many analysts, but we should also be concerned by the numbers that did — nonetheless — face famine conditions and very worried indeed by the developments that created this year’s shortages. Because although a global famine did not occur, the situation remains extremely precarious and many — including the UNWFP — see it as a crisis postponed rather than a crisis prevented.

To an extent I agree with Frank’s comment, in that historically the primary reason for famine and food shortages has been political. However I disagree that will always be the case and believe we are already beginning to see it change. This change is being driven by two primary factors; Climate Change and resource depletion. The latter, resource depletion, covers a multitude of direct and indirect problems. Water shortages (also linked to Climate Change), peak oil (which drives up biofuel production — in the US this year, almost one third of all corn produced was converted to ethanol — as well as damaging fertiliser and pesticide production) and a looming shortage of essential nutrients such as phosphorous. All of these threaten to significantly impact the quantity of food being produced on our planet.

Now, there’s no doubt that you can tenuously link all of these things to “politics” rather than “nature”. But in doing so you essentially blur the distinction between the two to the point of meaninglessness. The Climate Change-driven droughts become “a political problem” because we have failed to find the political will to curb our emissions. Peak oil becomes “a political problem” because we haven’t found a politically acceptable way to eliminate non-essential consumption of crude oil. And so on.

But as I say, that’s semantics. Historically, when we spoke of famines as a political problem we generally meant that the shortages in a given area were the result of inequitable distribution due to the political machinations of corrupt (or incompetent) regimes. So while the Russian grain export ban (extended for another year in September) is obviously a political decision, it’s just sheer-bloody-mindedness to insist that the reason for that ban — successive low crop yields due to unusual weather — is also political.

High food and fuel prices

If you take a look at the UNWFP website, you’ll see the phrase “high food and fuel prices” crop up time and time again. Frank Maloney’s comment makes specific reference to Ethiopia, so I checked out the Ethiopia page. Because although the feared global famine did not appear in 2010, we did nonetheless suffer food shortages in several places this year and also witnessed food riots around the world. Ethiopia was one of the places to suffer, with the food security of over five million people coming under serious pressure. This is attributed to “a combination of factors: poor and erratic rainfall over the last two years, the high food and fuel prices that hit the country in 2008 and are persisting and the global financial crisis.” Of these factors, only the last one is unambiguously a political problem.

It is my contention, and I believe this is backed up by the evidence, that the current high food prices are here to stay (which isn’t to say that there won’t be periodic dips in the price, but like oil I feel we have reached a production peak — or perhaps “plateau” might be a better word — and that a long term drop in global food production is inevitable). As I say, there will be peaks and troughs; perhaps the weather in Russia and China will be perfect next year and we’ll see a bumper crop, but it looks almost certain that we’ve entered a new phase whereby Climate Change and resource depletion have placed our global production on a downward trend, notwithstanding the occasional spike.

In the wealthy countries this will mean we’ll have to spend more on our weekly shop. There’ll be some belt-tightening but starvation is unlikely. Here in Ireland, for instance, the combination of high food prices and economic collapse has resulted in a 2.6% drop in food consumption per capita in 2010 alone. For a nation that, by-and-large, has been overconsuming for a couple of decades, that’s not going to create serious hunger. But in the parts of the world already close to subsistence-level, that’s the kind of reduction that can tip them over into famine.

And it’s not the result of political decisions, or at least, it’s not only the result of politics; instead it’s the result of a very real drop in global food production. And there are few serious analysts suggesting that’s not set to continue.

There’s a famous Irish rebel song, A Nation Once Again, with the following refrain…

A Nation once again,
A Nation once again,
And lreland, long a province, be
A Nation once again!

Written around the time of the Great Famine, it yearns for a time when the people of Ireland are in control of their own destiny and no longer just a province in someone else’s empire. Several rebellions (including the most significant, in 1916), one war of independence and one civil war later, Ireland eventually achieved self-determination and threw off the yoke of foreign rule.

Remarkably, during the past few weeks our government has reversed all that. And I can only assume that the relative lack of public outrage is down to the fact that most people have yet to realise that’s what’s happened. But when they do…

Well, to be honest I don’t know what’ll happen when they do. If economist Morgan Kelly is correct, it’ll result in Irish society taking a dramatic lurch to the right… with the traditional parties eclipsed by the rise of an anti-Europe, anti-traveller, anti-immigration party. Kelly has a better track record than most with regards to our current crisis, having been repeatedly denounced as doom-mongering only to have his predictions borne out by subsequent developments. So, predictably, politicians and pundits have been rushing to denounce him yet again.

I think he’s right about the scale of the problems looming in the near future, though I’m less convinced by his claims that Ireland will lurch rightwards. My own reading of Irish society is that we’re more likely to lurch left. Socialism is part of our cultural DNA. Our constitution is infused with it, and almost every one of our national heroes was “of the left”. I think we’re more likely to see an anti-market backlash rather than a descent into xenophobia. Leastways I hope so.

Of course, it’s not that the Fianna Fáil / Green coalition secretly sold the country back to the British. That particular empire is long gone and besides, they have their own problems now… I doubt they could afford to take us back — even at the knockdown price which would be accepted by our betrayers in government. No, this time we’ve been delivered into the hands of international capitalism. It’s a more abstract empire certainly, but no less ruthless.

How did we get here?

Just over two years ago, it emerged that a small group of people had managed to comprehensively torpedo the Irish financial system. These people fell into three categories… property developers, bankers and politicians. The developers, driven by greed and stupidity, took out massive loans to buy overpriced land on which they built houses, hotels and offices that nobody needed and for which there was no market. In total we’re talking about tens of billions here. For a country the size of Ireland it’s an absurd amount of debt.

The bankers, driven by greed, stupidity and cocaine happily approved the loans without bothering to consider the consequences. In many ways they were worse than the developers who at least technically did their job… the empty houses, hotels and offices do actually exist. The job of the bankers on the other hand was to approve loans with a half-decent chance of repayment. Nobody expects them to have a 100% track record, but to have so spectacularly misjudged the market demonstrates that they simply hadn’t the faintest idea what they were doing. If the developers had been as bad at their jobs as the bankers, every day the news would be filled with stories of buildings collapsing.

Worst of all though — and given how utterly useless our financial sector was, that’s really saying something — was the performance of our politicians. Charged with passing our laws and with protecting the people of Ireland, the government somehow neglected to make “destroying the Irish economy in pursuit of personal profit” a criminal offence. The deregulation of our financial system, the lack of oversight and the enthusiastic support for unsustainable practices brought the nation to its knees. What’s worse, having allowed this to occur on their watch, our government decided it would try to put things right not by protecting the interests of the Irish people (i.e. those they are legally obliged to represent) but by protecting the interests of the very financial institutions that created the mess.

It’s a staggering sell-out of Ireland. One that will last for generations to come. And as this slow collapse plays out on the world stage it is vital to remember that the massive millstone of debt that now hangs around the neck of the Irish people was not incurred by them. It was incurred by private businesses (banks and developers) and legal liability lay squarely on bond-holders.

This is an important point and one that’s not stressed nearly enough. There was no obligation on the Irish public to pay for the debts run up by the banks. The international bond markets were legally obliged to absorb the losses when those debts turned bad (as many of us predicted they would do). They took the risks. They would have reaped the rewards, in interest, had the debts been repaid. And yet, the government of Ireland has decided that rather than allow this to happen, they would instead repay those debts from the public purse. It’s nothing short of a massive expropriation of public funds by the private sector. And it’s all happening out in the open, as though it were the most normal thing in the world.

Good old capitalism.

Remarkably, it now seems as though the bond markets have engineered a situation where they’ve eliminated any and all risk of loss by ensuring that it gets covered by public taxation. It’s welfare fraud on an unprecedented scale. And it gives investors a licence to take more and more foolish risks because they stand to lose nothing when their greed and idiocy inevitably results in disaster.

Instead Irish schools and hospitals suffer. Individuals whose jobs have evaporated thanks to this obscene mismanagement of the economy find themselves with an increasingly threadbare social security net. Councils are forced to slash services and the youth of the nation once again finds itself forced to choose between emigration and poverty. And all this is being imposed on us by our government in order to insulate international bond-holders from the losses they themselves incurred. From the risks they took. The poor, the sick and the vulnerable are forced to suffer the consequences of the reckless greed of the wealthy.

And it’s so disproportionate it beggars belief. While with one breath politicians assure us that every sector of society must share the burden, with another they tell us that a rise in corporation tax is not on the cards. It was corporations who created this problem, yet far from sharing the burden equally, that’s the one sector not being asked to contribute in any significant way to the solution.

If you ever needed evidence that the government of this country places the interests of the free market above the interests of the Irish people, this is it. As a result of government policy, tens of thousands of people in Ireland will be faced with choices like whether to skip some meals or to pay the gas bill. They’ll put off doctor’s appointments to ensure their kids get new shoes. Their savings will disappear as they try to keep up payments on their mortgages, all the while receiving nasty letters from banks who defaulted on their loans.

People mutter and shake their heads, but beyond the metaphorical, there’s not even much fist-waving going on. With the exception of the recent student occupation of the Department of Finance building and the chap who drove his cement mixer into the gates of The Dáil, there has yet to be a response proportional to the crimes being committed by our government and the markets they serve.

How long before the barricades arise?

A couple of days ago, over in the UK, there was a large student demonstration against government policy. A group of protesters split from the main march and occupied the Tory Party headquarters in Millbank. There were clashes between this group and the police resulting in some minor injuries and property damage. An estimated 50,000 students took part in the main demonstration and somewhere in the region of 50 of them were arrested for the building occupation. Yet almost without exception, the reports in the media have focussed on those 50 rather than the other 49,950. The actions of 50 people have apparently “overshadowed” the entire event.

One week earlier, a similar protest took place on the streets of Dublin. Somewhere between 25,000 and 40,000 (estimates vary wildly as they always do with such things) students took part. Once again the march splintered, and in this case the Department of Finance building on Merrion Row was occupied. As with the subsequent London action, around 50 people were blamed for this occupation. Or, in the words of the Garda (repeated over-and-over in the media coverage), the protest was hijacked by “a hardcore of around 50 protestors intent on trouble“.

In both cases, the respective national student unions loudly condemned the actions of the “hardcore” minority, acknowledging that while they do indeed oppose government policy, they do so only in a “softcore” fashion. Heaven forbid anyone get the impression they took the matter seriously.

Now, I happen to think that the occupation of government buildings is a perfectly proportional response to the policies being implemented on both sides of the Irish Sea — which is not to say I condone every individual act carried out during those occupations; the chucking of a fire-extinguisher off the roof of the Tory headquarters was reckless and counter-productive (in my opinion). But let’s ignore the rights and wrongs of the occupations for now… that’s not the focus of this particular piece.

Instead let’s talk about how the protests have been covered in the media. Because, while the media’s tendency to give massive coverage to confrontation at the expense of covering the actual issues is a well-known phenomenon, I don’t think enough has been said about their complicity in that confrontation.

Let’s examine again how the demonstrations are described by the media. We’re told that the violence “overshadowed” the peaceful march. That a group of 50 people “hijacked” the protest. But let’s not mince words… those are just lies. Shameful lies disseminated by almost every single journalist who covered the events. The Irish protest wasn’t “hijacked”. It went off exactly as planned, with a mass gathering featuring tens of thousands of people who felt they had legitimate grievances that deserved an airing. Large numbers of people voiced their discontent and (though I wasn’t at either of these demos, I’ve been at enough such occasions to say this confidently) speeches were made that articulately dealt with the policy issues at hand. And the people who occupied Tory headquarters didn’t “overshadow” the main march, the media decided that their actions deserved more prominence. So it was the reporting that obscured the main march, not those who occupied the building.

Now, the media’s justification for this is that a few scuffles, some (minor) property damage and a short-lived group-trespass are somehow more worthy of airtime than the main protest. But that’s nonsense of the highest order. Palpable nonsense.

Visit the centre of any city or large town on these islands at pub-kicking-out time on a Saturday night and I guarantee you’ll be in with a decent chance of finding more scuffles and property damage than occurred at both student protests combined. And it’s not national news. A few bruises, one broken nose and a handful of smashed windows is not important in the sense that 50,000 people taking to the streets to condemn the actions of their own government is important. To suggest otherwise is, as I say, a lie.

The truth is, it’s just easier to make the confrontation the main story. The photographs or film footage is more dramatic, and the journalists get to use action verbs like “smashed” and “charged”. It takes a reporter with genuine talent to turn a peaceful mass-opposition to government policy into a good story. They need to do far more research and to genuinely understand the issues involved. Plus they need to be good enough writers to hold a reader’s attention without the use of action verbs and dramatic photographs.

If the media actually covered the protest in terms of what was important about it, rather than in terms of what was easiest; it would be a full page article about government plans to shred the principle of universal access to education. It would cover issues like the subordination of the education system to the profit-motive… like the gutting of the arts and humanities, not because they aren’t important, but because the free-market places less financial value upon them… like the social engineering programme being implemented by capitalist governments to exclude whole classes of people from higher education on the grounds that their parents aren’t wealthy enough.

In that full page article there would be a couple of lines about how roughly one tenth of one per cent of those who demonstrated ended up smashing a few windows.

And what’s worst of all, damn near every person on those marches is smart enough and educated enough to realise that without that one tenth of one per cent, the entire mass demonstration will hardly get mentioned at all. In the eyes of the media, it will be considered largely unimportant. So, Caught-22 as they are, it is almost inevitable that demonstrations now include a confrontational element. The media demand it.

I read this in the Irish Times today…

Three castaways on a desert island find a crate of canned food. The first, a theoretical physicist, comes up with a model of a machine that can open cans with astonishing efficiency, then realises there is no material to build the machine. The second, an engineer, tries to open the cans with everything available – stone, stick, coconut – but all in vain. The last one, an economist, steps in and starts: “Let’s assume that we have a can opener…”

Ha Joon — author of: 23 Things They Don’t Tell You About Capitalism

Commercial advertising directed at children is one of the great evils of our age. Benjamin R. Barber’s excellent book, Consumed, examines the phenomenon in detail and presents sobering evidence that the aggressive marketing of consumerism is infantilising adults while simultaneously stripping our young of their childhood; ultimately commodifying even the bonds between human beings so that interpersonal relationships are becoming ever more pathological as new generations are forced to identify more with brands and media imagery than with family or friends.

Gregory Bateson’s work on what he calls deuterolearning (or “learning to learn”) suggests that serious social, cultural and psychological damage can be done when this process is perverted by those seeking to manipulate the development of the psyche for commercial or political gain.

Which is why, despite the fact that California may have let us all down with their failure to pass Proposition 19 yesterday, at least they’ve gotten one thing right this week. The city of San Francisco has passed a law ensuring that fast-food chains are now prohibited from giving away free children’s toys with unhealthy meals. This, by now ubiquitous, trend is a marketing ploy that frankly, is not a million miles away from child abuse.

After all, the intention of this strategy is to link extremely unhealthy food with the receiving of fun gifts in the minds of children. It is a craven manipulation designed to generate profits at the expense of the health of children. And let’s remember, children are particularly susceptible to this form of emotional and psychological manipulation as they are still learning to learn. Indeed, all marketing aimed at children is no less than a conscious attempt to subvert the development of the young mind and train it to be a less critical consumer. When the marketing involves a product that is so unhealthy, it’s all the worse.

So well done San Francisco, and here’s hoping other places quickly follow suit.