tag: Economics

May 2013

Even the ‘centre left’ is on The Right

A little while ago I put together a graphic as a metaphor for just how much the political spectrum has shifted (specifically in the western liberal democracies) over the past few decades. This shift wasn’t started by Thatcher and Reagan, but they – and those who followed them – did most of the heavy lifting. The result of this shift was to effectively exclude the left-wing from mainstream politics, so that today, those who would once have been viewed as being centrists, are now the hard-left. Views that would label one as a moderate left-winger in the 1960s would – in the opening decades of the 21st century – place one firmly in the radical communist camp (and as such, essentially irrelevant when viewed from the mainstream).
Modern political spectrum
In my view, this shift has been tremendously damaging to the societies in which it has happened – and to western civilisation in general. By narrowing the discussion, we narrow the possibilities available to us. The result is a significant reduction in the amount of flexibility* within our culture. Thatcher, Reagan, their acolytes and fore-bearers quite rightly must shoulder a large proportion of the blame for this loss of flexibility and consequent social damage. But the blame does not lie entirely with them. Indeed an argument could be made that their role in this political shift was less influential than that of the leftists and centre-leftists who allowed themselves to be dragged – or in many cases, who willingly stepped – to The Right.

And the fact that – for example – the Labour Party in the UK can still be described as “left wing” in the mainstream media demonstrates just how insidious this shift has been (it’s “the country’s leading left-wing party” according to The Guardian; a supposedly “left-wing” newspaper). This is despite the fact that some members of the Labour Party have denounced unions for “exert[ing] excessive left-wing influence” (source). At the same time, the party talks openly of its plans to “rescue capitalism” (source). When rampant capitalism plunges the entire world into major crisis, anyone who is genuinely “on the left” would be talking about ‘a new socialism’ or asking ‘how do we replace capitalism with something more just and sustainable?’ If your priority is to “rescue capitalism” then you are “on the right”. To suggest otherwise is ignorance. Or it’s propaganda.

Meanwhile, across the Irish Sea…

This shift to the right has, of course, not been restricted to a few places. Certainly there are exceptions (often significant ones… most notably in South America), but as a general rule it has swept across the globe and infected almost all so-called “liberal democracies”. Ireland’s socialist traditions were savaged by the Celtic Tiger, and the speed with which our own Labour Party dashed rightwards was undignified in the extreme. They almost kept pace with Tony Blair… and that’s saying something. Strangely enough though, our media appears to be slightly more perceptive than that of our British cousins, and it’s quite difficult to track down a recent example of the Irish Labour Party being described as “left-wing” in the mainstream media. Nonetheless, they are still described as being “centre left” by most political commentators and are still members of Socialist International and the Party of European Socialists.

This ill-informed nonsense really needs to be challenged. When a member of Labour (or indeed one of their critics) describes the party as being “left” or “centre left” they should be robustly lampooned for the sheer absurdity of their utterance. They should be viewed in roughly the same light as a spokesperson for the North Korean regime who insists on describing the nation as the “Democratic People’s Republic”. Sometimes labels are important. And when the Irish Labour Party talk about being “a centre left alternative” they not only make a mockery of our public discourse, they actually damage the political fabric of the nation. How can people – especially younger people who have grown up with this new political spectrum – possibly understand political reality, and hence make sensible use of their political influence, when identical policies born of rampant capitalism are labelled centre-right by one party and centre-left by another?

The Irish Labour Party was formed by James Connolly, William X. O’Brien and James Larkin… genuine revolutionary socialists. When I see the modern Labour Party’s annual Connolly Commemoration, it’s difficult to hold down the vomit. There’s a lot of “comedy of dubious taste” that I will admit to finding amusing. But this graceless charade is deeply unfunny, and they should really be required to stop it. If I were to visit Arbour Hill Cemetery every year to urinate on the grave of James Connolly I suspect I’d soon find myself behind bars. Why should Eamon Gilmore be treated any differently?

An Apple a Day keeps the Revenue Commissioner Away

Of course, these thoughts aren’t new to me (or this blog). But every now and then something will prompt them to bubble back to the surface where they must be vented, lest the pressure build up and blow the top off my head. Today that prompt was provided by Labour Senator, John Gilroy. In a single tweet, he illustrated just how far rightwards the Labour Party has moved since the days of Connolly, Larkin and O’Brien.

The tweet came as part of a conversation between Gilroy and Michael Taft. Taft is “Research Officer” for the Irish UNITE trade union and is one of the most recognisable faces of the modern Irish trade union movement. Of course, just as with mainstream political parties, the Irish Trade Union movement has been a victim of the rightward lurch. Thankfully, they’ve not been dragged quite as far from their original principles as the Labour Party and haven’t been quite as eager to embrace selfish individualism and unfettered capitalism. Yes, they’ve all but abandoned any tendency towards militancy. And their opposition to the austerity policies imposed by – among others – the Labour Party with which they are affiliated, has been muted and ineffective. Nonetheless, Taft and others within the movement have at least continued to publish the data which demonstrates the truth behind government lies.

Today for instance, Taft responded to the embarrassing nonsense emerging from the government on the subject of corporate taxation. For those who haven’t followed the story, it recently emerged that the largest corporation in the world (by certain metrics), Apple, “paid taxes of just 2 per cent on its foreign earnings”. It did this “by channelling much of its huge overseas earnings through a network of Irish subsidiaries to minimise its tax bill.” (source) In response to this revelation, the US Senate condemned Ireland’s status as a “tax haven”.

What was the response of the Irish government? Well, initially at least, it hasn’t involved a promise to clamp down on corporate tax avoidance. Instead, we’ve had both coalition parties issue whinging statements insisting that Ireland is not a tax haven, and how dare anyone suggest otherwise. In fact, our government plans on writing a stern letter to the US Senate to that effect.

“Yes”, they will say, “the largest corporation in the world funnels huge amounts of profit through our country. And yes, we pretty much ignore it and don’t even require them to adhere to our already laughably pro-corporate taxation regime. But that doesn’t make us a tax haven.”

They don’t really explain why Ireland isn’t a tax haven. I mean, they try of course; they talk about how US corporations actually employ people and manufacture things in Ireland, which is a far cry from buying a P.O. Box in the Bahamas. But while technically true, it’s misleading to the point of almost being a lie. Apple funnelled almost two-thirds of all profits earned in 2011 through Ireland despite less than 5% of its global workforce being employed here (source). So no, Ireland isn’t identical to the Bahamas, but in terms of tax policy, we certainly have a hell of a lot in common.

And today Michael Taft ably demonstrated this fact with an article (Tax Haven Dictionary) on his website. It includes data to prove that Ireland’s effective corporate tax rate is far closer to the likes of Luxembourg and the Bahamas, than it is to places like France or the UK. This article then sparked a twitter conversation between Taft and the Gilroy (the Labour Senator). Gilroy’s final contribution to the conversation was to pose the question: “does the current tax regieme give ireland a competitive advantage?” If it hadn’t been typed, one imagines it being asked in a fairly triumphalist tone of voice.

Now, Taft’s response to the question was: “Less than is imagined. Will be discussing that in an upcoming post.” However, I want to ignore that response (at least until Taft’s article is published) and concentrate on the question and what it implies about John Gilroy and the Labour Party in general.

The Purpose of Taxation

If you were to ask any one of the founder members of the Irish Labour Party, “what should be the prime motivation of Irish taxation policy?”, their responses would have all been along similar lines. “The redistribution of wealth with the purpose of reducing socio-economic inequality”. Pretty simple really. It’s a philosophy that underpins all genuine socialism, and – I would argue – is at the heart of any attempts to achieve widespread social justice in a large society. Taxation policy, therefore, is primarily designed with the interests of the majority in mind.

By the 1980s however, “redistribution” had become a dirty word and the left wing – as part of their inexorable shift rightwards – had begun to describe taxation policy as a means to fund essential social services for those who could not afford them. Already at this point we see a major change in the mainstream left’s attitude towards taxation. It’s no longer primarily aimed at reducing socio-economic equality and is now focussed on providing a basic safety net to prevent the poor from starving or dying of easily-preventable illness. The rich can get as rich as they want so long as they chuck a few quid into the bucket to pay for minimal social services. Taxation policy by this point (in the eyes of the mainstream left, remember) is no longer about the interests of the majority and has become a question of accommodating the interests of a small minority while retaining enough of a welfare state to ensure corpses don’t start piling up on the streets.

By the late 90s of course, the right wing was already begrudging society’s expectation of a minimal contribution from the rich and powerful. At this point the mainstream left could have salvaged a shred of dignity by standing firm, insisting that they’d already made a massive compromise in their wholesale abandonment of the social justice agenda, and The Right would just have to accept the obligation of the wealthy to allow the occasional crumb to fall from their replete table.

But they didn’t.

Instead they simply bought into the right-wing agenda of rampant greed and the increasing concentration of wealth. So now we have a Labour Party Senator openly acknowledging that taxation policy can be justified by how well it serves the interests of large multinational corporations even if it is clearly not catering for the needs of the wider population. It’s obscene. And any vote for Labour at the next election is obscene too.

Some might suggest that John Gilroy and his ilk are more concerned with the international competitiveness of Irish tax policy than they are with its fitness for purpose. But it’s a lot worse than that. John Gilroy and his ilk see Irish tax policy as perfectly fit for purpose. Because they see that purpose in terms of international competitiveness, not in terms of social justice. John Gilroy and his ilk need to be cast firmly into the political wilderness; they have no right to a place in our national discourse. Instead they should go work directly for the corporations they represent. Though I doubt they’d be considered competent enough to do so.

* I am using the word “flexibility” here in the Batesonian sense; see: “Bali: The Value System of a Steady State” and especially “Ecology and Flexibility in Urban Civilization” (both in Steps to an Ecology of Mind, by Gregory Bateson). At its most basic, Bateson’s “flexibility” can be defined as “uncommitted potential for change”, and he argues that any reduction in this flexibility will have negative consequences on the ability of society to handle crises. Ultimately, if you reduce flexibility enough you will be left with a society that cannot cope with even minimal change without sustaining damage (up to and including finding its very existence threatened). In this sense, flexibility becomes a measure of the health of a society. Bateson also argues that as the flexibility within a culture decreases, there is a corresponding decrease of flexibility within the environment that sustains the culture, but that’s a discussion for another day.

4 comments  |  Posted in: Opinion

Apr 2013

What’s in the wind, I wonder. Money worry.

Typical of the Irish financial industry’s inability to get anything right, today we learnt that the Central Bank is unable even to copy a couple of sentences without screwing up. In what is clearly something of an embarrassment, a limited edition silver €10 coin minted in honour of James Joyce contains an error in the Ulysses quotation inscribed upon it.

James Joyce coinThe coin features a portrait of Joyce alongside a quotation from his most famous work (and perhaps the finest work of literature in the English language). While the error, arguably, isn’t a huge one (the insertion of the word “that” in the second sentence) it reveals much about the Irish Central Bank. Either it’s just a mistake – in which case, we see once again the sheer incompetence of those in charge of our money supply. Or it’s deliberate… and we see yet more of the arrogance of our bankers, believing themselves a better judge of how the lines should flow than Joyce himself. Sheer incompetence or blind arrogance? Neither are particularly desirable traits in those who control our finances.

Personally I think the real problem is the chosen quotation. Don’t get me wrong… “Ineluctable modality of the visible: at least that if no more, thought through my eyes. Signatures of all things I am here to read.” is a glorious couplet. Indeed, you could pluck a line from damn near any page of Ulysses and have a piece of writing worthy of carving into metal. I just think there are more appropriate lines given the current state of the nation. My own suggestion, for example…

I have no money but if you will lend me your attention I shall endeavour to sing to you of a heart bowed down.

Alternatively, they could make reference to the collapse of credit availability with Stephen’s line…

Where would I get money? Mr Dedalus said. There is no-one in Dublin would lend me fourpence.

And there are many many others that would better fit the mood of the times.

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Apr 2013

Thatcher: On balance?

On the negative side there was…

  • Support for apartheid.
  • Scorched earth monetary policy – a vast proportion of what’s wrong with the world emerged in the 80s thanks to the Thatcher/Reagan axis of evil.
  • Rampant financial deregulation – and we’re still suffering from this
  • “We are being flooded!” – speech about immigration in 1979.
  • Shoot-to-kill policy in Northern Ireland.
  • Section 28
  • The Falklands War. I don’t support Argentina’s invasion, but the relish with which Thatcher exploited it for her own political ends was vile.
  • Massive increase in socio-economic inequality – an inevitable and wholly predictable result of her policies.
  • Fatally undermined local democracy.
  • Beginning of the end of the NHS.
  • “Make a quick buck” privatisation of essential services… introducing the profit motive where it doesn’t belong and making life worse for the average person.
  • Government contempt for a whole swathe of the workforce – social workers, teachers, NHS nurses, etc.
  • “There is no such thing as society”
  • Care In The Community
  • Support for mass murderer, Augusto Pinochet.
  • Ripping the heart out of local communities
  • Treatment of striking workers
  • Poll tax
  • Staggering increase in youth homelessness
  • Harking back to Victorian morality and constant use of the phrase “family values” from a government that included Cecil Parkinson, Alan Clark, David Mellor, Jeffrey Archer and Jonathon Aitkin
  • Beginning of the end of the UK’s genuinely progressive social housing policies.
  • Sheer, rampant viciousness.

On the positive side…

  • Before entering politics was part of the team that developed soft-scoop ice-cream.

… but as much as I like ice-cream… well.

7 comments  |  Posted in: Opinion

Mar 2013

All fools

Tomorrow is April 1st. The day when, traditionally, we’re encouraged to play practical jokes on one another. Over in the UK, the Tory government (note: just because the Lib Dems are part of the coalition doesn’t stop it from being a Tory government… Clegg’s All-Star Sell-Outs are merely craven enablers) has got a truly hilarious jape up their collective sleeve. Because that’s the date when the new tax and welfare reforms come into force. “Hilarious?” Well, historically speaking, heaping misery upon the poor and vulnerable has generally provided an endless source of amusement for those in power.

Iain Duncan-Smith (the face of evil)Make no mistake, what’s happening in the UK tomorrow is not an honest attempt to reduce the deficit or “balance the books”. Rather, it’s the introduction of yet another series of policies aimed at transferring wealth from the bottom to the top. Tax cuts for the wealthy coupled with benefit cuts for the poor can’t be honestly interpreted otherwise. Especially when occurring in tandem with the wholesale dismantling of the National Health Service. It’s my contention that the UK is currently witnessing an extreme example of class warfare. One wonders when the poor will consider fighting back.

Certainly, social media is buzzing with exhortations to “rise up”. But in our digitally mediated world, that seems to translate to little more than adding one’s name to an online petition. And I’m sorry to say it, but I just don’t see the Tories changing their policies because lots of people type their email address into a website.

What’s more, the last polls I read suggested that a snap General Election would result in an overall majority for the Tories (with the Lib Dems facing complete meltdown, coming in fourth behind Labour and UKIP). This is not because the majority of voters are being made better off by these “reforms”; it’s because people are apparently easily persuaded to vote against their own best interests.

… under existing conditions, private capitalists inevitably control, directly or indirectly, the main sources of information (press, radio, education). It is thus extremely difficult, and indeed in most cases quite impossible, for the individual citizen to come to objective conclusions and to make intelligent use of his political rights.

Albert Einstein | Why Socialism?

Michael Noonan (the face of evil)Of course, it’s not just the British people who are guilty of this kind of self-harming behaviour. Here in Ireland the public have been reduced to a flock of turkeys consistently voting for Christmas. The heart was ripped out of the country by more than a decade of Fianna Fáil government. In response, we voted for Fine Gael – a slightly more right wing party whose policies were essentially identical to those of Fianna Fáil. And then we acted all surprised when nothing changed. Current polls suggest that Ireland is angry at this lack of change… and that as a result, Fianna Fáil are making huge gains once again. Seriously.

A Word About Cyprus

Meanwhile, on an island in the Mediterranean Sea something strange is happening. In an attempt to save their economy, the government of Cyprus (under extreme pressure from Germany and the ECB) is imposing a windfall tax on bank deposits above €100,000. The right wing see it as an outrageous attack on private wealth (though when they learn that the money will be used to prop up the banking system, some of them reluctantly accept it as a necessary evil). The left wing, meanwhile, find themselves backed into a contrarian naysayer corner. They oppose the policy because the ECB are in favour of it. And they warn that Cyprus is just the test-case, and that this policy will spread.

To which I reply… “Great!” I mean, isn’t this essentially a wealth tax? Isn’t that what the left have been calling for since this financial crisis began?

Personally I’d have set the limit a little higher than 100k (so that pensioners wouldn’t be hit quite so hard), but even at 100k this is a policy I would support not only for Cyprus, but for Ireland and on a pan-European basis. Of course, the extremely wealthy tend not to leave most of their wealth lying around in banks, so the policy should be introduced in tandem with a tax on stock-holdings and other investment devices. The fact is, Cyprus is the first nation to genuinely force the wealthy to bear some of the burden of austerity. Despite claims that “we’re all in this together” or “the burden must be shared”, European austerity measures have hit the poor and vulnerable hard while actively protecting the wealthy and powerful. Cyprus has turned that on its head and should be loudly applauded for it.

Meanwhile, here in Ireland (and across the water in Britain) our corporate media continues to push the market-capitalist, neoliberal agenda on the people. And we lap it up willingly despite the fact that it’s demonstrably against our own interests. April Fools… the lot of us.

2 comments  |  Posted in: Opinion

Feb 2013

Comparative losses to Irish exchequer

Earlier this month, a chap called Andrew Fisher posted a diagram to Facebook demonstrating the relative losses to the UK treasury produced by tax evasion / avoidance and benefit fraud.

Rather shamelessly, I decided to nick the idea wholesale and use it to illustrate the same point in an Irish context. The Irish government, however, makes the exercise far more difficult than their UK counterparts. They do not publish any estimates of unclaimed social welfare entitlements. Nor do they publish any estimates of income lost through tax evasion / avoidance. However, they do publish estimates of social welfare fraud. This fact alone is extremely revealing and seems to answer the question… is our priority to balance the books? Or to demonise the poor?

However, an international organisation called the Tax Justice Network does publish a country-by-country estimate of revenue lost to tax evasion / avoidance. So that figure is available despite the best efforts of the Irish government to hide it from us. The amount saved in unclaimed payments, however, is not – to the best of my knowledge – available anywhere. If someone has a reliable source for this figure, then please do let me know in the comments.

So the next time you hear a government minister lambast welfare fraud, or see a tabloid headline shrieking about “benefit cheats”… well, the diagram speaks for itself.


Total social welfare budget: €19.797 billion
Estimate of “fraud and error”: 3.4%
(average of lower and upper estimates – 2.4% and 4.4%)
Proportion of “fraud and error” attributed to fraud: 31%
Proportion of “fraud and error” attributed to error: 69%

Tackling Social Welfare Fraud (an Irish government publication)

The estimate by the Tax Justice Network of amount lost in tax evasion / avoidance is reported in the Irish Examiner.

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Feb 2013

The UK Bedroom Tax

Here in Ireland the government is waging low-level war on the poor and vulnerable. Hiding behind the utterly false claim that their “hands are tied” by the conditions of the bailout, they inflict death by a thousand cuts on those least able to sustain those cuts. A few million off disability allowance here, a tax on child benefit there… a property tax here, a reduction in the rent allowance cap there… pretty soon the poor are even poorer and even those on middle incomes find themselves bled dry. Which in turn, of course, means the vast majority of people are spending less, with inevitable negative consequences for the local economy.

Meanwhile, Enda Kenny and Fine Gael along with the traitorous Labour sycophants who toe the right-wing neoliberal line (in return for a few years with their snouts in the trough) steadfastly refuse to impose any meaningful austerity on those who can actually afford to shoulder a greater share of the burden. Profitable corporations and high income individuals remain untouched by the vicious cuts imposed elsewhere. Ireland remains a wealthy country, but the wealth is all concentrated in the hands of a small minority who are not expected to contribute to the well-being of the rest. As much as I’d like to see genuine socialist policies enacted in Ireland, I don’t expect it to happen given how much the political spectrum has narrowed over the past few decades. I do expect a modicum of basic fairness though… but it seems even such a humble expectation is thwarted by craven politicians without an ounce of decency or honour among them.

And yet, despite this betrayal of the vulnerable by those entrusted with representing their interests, we Irish merely have to look to our nearest neighbour to see what happens when a low-level war on the poor turns into an outright assault. I genuinely don’t understand anyone who votes for the British Tory party. Seriously, I just don’t get it. Those who defend the Conservatives generally mutter something about “sound economic policies” or how “business friendly” they are. Or maybe they’ll use the phrase “the party of law and order” or mention “family values”. But all of this ignores the fact that choosing a Conservative government is choosing to be ruled (and the way they run the government definitely merits the word “ruled”) by a bunch of vicious bastards without a shred of compassion who appear to genuinely enjoy inflicting suffering upon those they consider “less deserving” than themselves (a category that includes damn near everyone in the country).

David Cameron’s party consists of a bunch of small-minded, nasty little shits. Every single one of them. And even if they did have “sound economic policies” (which incidentally… they don’t!) it wouldn’t compensate for them being small-minded, nasty little shits.
Small-minded nasty little shits
The latest wheeze being introduced by the Tories is the “bedroom tax”. Leastways, that’s how it’s now known. Essentially this slice of undisguised cruelty applies to anyone in designated social housing, or receiving rent allowance. If they have an unoccupied bedroom in their house, their social security is reduced by 14%. Two spare rooms results in a 25% reduction. These are people right on the very edge of poverty (hell, many of them are already over that edge). Cutting their social security benefits is likely to leave them either cold or hungry (probably both). It is quite deliberately inflicting extreme hardship on people whose lives are already pretty damn hard. Meanwhile the British government continues to spend more on their military than all but three other nations. They continue to allow large corporations evade tax and they reduce taxation on the wealthiest individuals… they even go so far as to heavily subsidise some of the most profitable companies in the country by offering them a large, free workforce (an utterly self-defeating strategy, incidentally, and one that’s about as far from “sound economic policies” as it’s possible to get).

Bedroom taxOf course, the bedroom tax will hit certain people disproportionately. People who require carers (i.e. those with disabilities or health issues) are likely to get the most vicious kicking. I guess the Tory Party (along with their obnoxious enablers, the Lib Dems) can at least claim to be an Equal Opportunity Bully. And while it’s completely understandable that organisations who represent carers and those with disabilities will campaign on behalf of their interests, it seems to me that this is a much wider issue of social justice. Of course it’ll be a good thing if the most vulnerable manage to win themselves an exemption, but it won’t be cause for celebration. It will merely be a further example of a right wing government successfully pitting one group of vulnerable people against another. Everyone in the UK should be angry about this tax being imposed on even one person; carer, disabled, ill, healthy, able-bodied, it doesn’t matter… this is a fundamentally evil policy and its imposition will make the UK a fundamentally less just place.

For a party that claims to be all about “small government”, it’s difficult to imagine anything more intrusive than a policy aimed at stipulating the number of rooms a person may have in their house based upon their economic circumstances. People who have perhaps lived for years in a house or flat with an extra room will now find themselves forced out of their homes (or go hungry… can’t say they don’t have a choice I suppose) by a government that insists it hates interfering in the lives of people. What they really mean, is they hate interfering in the lives of people who matter. In other words, the rich.

But if you’re poor; they’ll tell you what house you can live in, they’ll tell you what job you must do, they’ll take away your healthcare and force you into debt if you want an education. Small-minded, nasty little shits. And I’m sorry to say this… but if you vote for them, then so are you. There are no longer any excuses.

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Feb 2013

The Anglo Promissory Notes

Still busy busy busy with work, but I’ve got just enough time to post a few thoughts here.

Today, over at On This Deity, my article on The Maastricht Treaty has come around again. I’m not sure whether it’s appropriate or entirely inappropriate that, on the anniversary of the treaty that probably did more for European political and economic integration than any other single act, the Irish government have passed the Irish Bank Resolution Corporation Bill 2013 (PDF).

supplicationThis Act of Parliament is being hailed by the government as a great success. And they expect it to lead to a deal with the ECB on the issue of the Promissory Notes. All of which probably sounds like gibberish if you’re not familiar with the Irish situation. So here’s a brief crash course:

In 2007 the Irish banking system began to creak. But everyone involved – bankers, regulators and the government – all insisted that nothing was wrong.

In 2008, the Irish banking system collapsed. The only thing that surprised me about this was the fact that lots of other people seemed surprised by it. The response of the Irish government was to issue a blanket Bank Guarantee. This was a massive mistake and I still believe the people responsible should be in prison. They’re not.

At the time Ireland had several banks, all of which were in serious trouble. The two main retail banks – Bank of Ireland and the Allied Irish Bank – were taken, in large part, into public ownership and the government is still propping them up. These are costing the Irish people quite a lot of money, but I can just about understand the argument in favour of the government’s course of action with these two banks, even if I think it’s wrong.

There was another bank, however, called Anglo-Irish Bank. This bank was responsible for massive loans to Irish property developers and – although we’re unlikely to ever get to the bottom of how this bank was mismanaged – the whiff of naked corruption coming from its direction is overpowering. Together with another failed financial institution (Irish Nationwide Bank) Anglo was renamed Irish Bank Resolution Corporation and effectively moth-balled. It ceased trading as a bank, but remained a trading corporation (or “zombie bank”, as it came to be known).

The reason for this was that the corporation owed upwards of €34 billion euros to European banks and investors who had pumped money – via Anglo-Irish Bank – into the Irish property market. Just so we’re clear; private investors and private financial institutions speculated on the Irish property bubble and when the bubble inevitably burst (as anyone with an IQ higher than that of a brain-damaged bumblebee knew it would), they demanded they suffer no losses as a result of their speculation. Instead, they exerted a huge amount of pressure on the Irish government to cover their losses. And – spineless gombeens, every last one of them – the Irish government acquiesced… transferring those gambling losses onto the shoulders of the Irish people.

This transfer was done using a mechanism called “Promissory notes”. In essence, our government promised to pay more than €3 billion to the zombie bank, on March 31st every year until 2023. The observant among you will note that €3.1 billion per year, every year between 2009 and 2023 comes to quite a bit more than the €34.7 billion owed by Anglo-Irish Bank. This is because the gamblers whose losses being covered by the Irish people are also demanding that we pay interest on their losses. You could make it up, but people would think you were high.

Anyway, this €3.1 billion per year is just for the Anglo mess. The Irish government is in all sorts of other financial and economic trouble without that particular millstone hanging around their neck. So ministers have been appearing on our screens for the past couple of years insisting that “a deal on the promissory notes” is just around the corner. It’s a hell of a big corner.

Because rushed, late-night decisions always turn out well

Last night, during a last-minute, rushed sitting of The Dáil (the Irish parliament) – in a move that eerily echoes the night of the blanket Bank Guarantee back in September 2008 – the zombie bank was finally wound up. Part of it was transferred to NAMA (the National Asset Management Agency), which was a structure set up to handle the bad debts of the banking industry after the collapse of 2008. And the promissory notes have disappeared for good.

CapitalismExcept they haven’t of course. The plan is to replace them with government-issued bonds. Perhaps 15 year bonds… perhaps 20 years… perhaps 30 years… who knows? Our government is awaiting instruction from the European Central Bank. Because heaven forbid the Irish people be permitted to have a say in the repayment terms for private debts they shouldered at the behest of the ECB.

As I say, this is being portrayed as a victory by our government. In reality it’s nothing more than the final step in the transformation of the private debt into sovereign debt. Up until now the mechanism of the promissory notes provided a barrier of sorts (albeit a very weak, almost invisible one) between the Anglo-Irish Bank losses and Irish sovereign debt. The Irish government – if it actually had any principles – could have cancelled those notes without triggering a sovereign default (though in all likelihood the markets would have reacted in much the same way as they would have done in the case of such a default). There would have been a short-term crisis, certainly, but this time next year the Irish people would have weathered that crisis and we’d have shrugged off €32 billion of debts we never incurred.

Of course, we’d still have billions of private debt on our books thanks to NAMA and the other banks, but that particular weight would have been lifted.

Instead, our government has basically mixed all that Anglo debt in with our other debt. It is ours now, and refusal to pay it would constitute a national default. Our finance minister, Michael Noonan, has managed to summon the awesome power of all twelve of his brain cells and sunk us even further into debt than we already were. As he did so, our glorious leader (Enda “The Irish People Went Mad Borrowing” Kenny) insisted that extending the terms of repayment represents some kind of triumph. I’m expecting to see a photo of him stepping off a plane waving an ECB document in the air. “Growth in our time” he’ll exclaim. And then trip down the stairs.

It strikes me that portraying a repayment extension as a victory is about as insidious as it gets. Ireland is like a man being forced to pay off someone else’s mortgage. “Look”, say the ECB, “we realise you’re having some problems paying this debt as fast as we’d like you to. So we’ve decided to let your kids help you pay it off once they’re old enough to work. Can’t say fairer than that!”

Except you can. Pretty much anything else you say would be fairer than that.

[The issuing of long-term bonds] is using posterity with the utmost cruelty; because it is leaving them the great work to do, and a debt upon their backs, from which they derive no advantage. Such a thought is unworthy a man of honor, and is the true characteristic of a narrow heart and a peddling politician.

Thomas Paine | Common Sense

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Nov 2012

Send in the drones

Last Tuesday – mesmerised as I am by coloured maps – I stayed up late enough to see Barack Obama hold onto the US presidency. So I went to bed early Wednesday morning knowing that Mitt Romney wasn’t going to be President of the United States. And I was glad about that. The lesser of two evils won. And as a friend pointed out, “The lesser of two evils is still evil, but is also lesser. That’s just maths.”

When I awoke the following day though, I was a little taken-aback when I watched his victory speech online. Don’t get me wrong, I understand that the people in that convention hall were precisely the people who will feel strongest about an Obama victory; but I found the sheer distance between their euphoria and my resigned fatalism a little disconcerting. Then I read an article about that mass re-tweeting of Obama’s “victory tweet” with the attached photo, and it floored me. According to a different article, that creepy photo of Barack and Michelle embracing has been shared by almost three quarters of a million people on twitter and 3.6 million Facebook users. That was last Wednesday; I feel certain the numbers are higher by now. And I’m pretty certain the vast majority of those people weren’t forwarding the photo as an example of “a creepy thing”.

And then I had three different discussions on social media forums which led me to realise that quite a lot of people seem to be relatively heavily invested in Obama; intellectually, emotionally, politically… however you want to put it. Mostly those on the American centre-left, but plenty of non-Americans too. They didn’t find that photo – and the shared urge of millions to forward it to their friends – at all creepy. They found it celebratory, uplifting, inspirational even. And that sense of disconnect I’d been feeling continued to grow.

Political puppets

Hey! There’s one guy holding both puppets!

Once again, let me stress that I’m glad Obama beat Romney. If someone put a gun to the head of someone I loved and told me to choose the next US president from between those two men, I would – of course – choose Obama. I’m not sad because the greater of two evils failed to win the election. I am, however, pretty sad that the entire world – but Americans in particular, as it’s their president we’re talking about here – appear to passively accept a state of affairs in which they choose between two evils every four years. Here in the 21st century, is that really the best we can come up with? Because it’s far from the best we can imagine. Is the gulf between our imagination and our ability to shape our society so vast? And have we completely abandoned all attempts to bridge it?

I understand that relatively rational, relatively liberal Americans are consumed by a fear of the right-wing crazies in their midst. There is a fundamentalist religious movement in America (along with a bunch of Machiavellian politicos willing to exploit it) whose views on many issues are right off the chart – whether it’s legitimate rape, the death penalty for rebellious children or that whole “teaching creationism as a scientific alternative to evolution” thing; there is a segment of the US population who appear to want some kind of psychotic theocracy. And I understand the celebrations of those who see Obama’s victory as having prevented that outcome.

But those celebrations rest upon two very dubious foundations (in my view). The first is the idea that a Mitt Romney victory represented such an outcome (I’ll explain in a moment why I don’t believe it would have). The second is the idea that returning a murderous war-criminal beholden to corporate America to the White House should be a cause for celebration under any circumstances. Even if the only alternative to Obama had been a bizarre genetic experiment comprising equal parts Adolf Hitler, Joseph Stalin and Osama bin Laden… even then, the proper reaction to a victory for a murderous war-criminal beholden to corporate America should be some brief muted applause followed by an immediate decision to change the system so that the lesser of two evils is not the only option next time around.

Mitt Romney: He’s no Jim Jones

Firstly, let’s clear up a few misconceptions. While Mitt Romney would have offered the occasional bone to the Tea Party movement and other religious fundamentalists in America, he’s certainly not one of them (Mormon or not). As president he would have had to take them more seriously than Obama; so yes, once again, I’m glad he didn’t win; but Romney represented the rich, corporate wing of the Republican Party; not the poor, deluded, religious wing. His position on things like homosexuality and gender politics is less liberal than Obama. But he’s far from the religious extremist that many Obama supporters saw him as. Just as Barack Obama was painted as a far-left, ultra-liberal communist Kenyan by the US right, so Romney was also demonised by the US left (admittedly, not to quite the same extent). Those on the left who cannot see this, or deny it happened, or insist that “their side” would never use such dirty tactics are – sadly – just as deluded as those who believe the nonsense spewing from Fox News.

First and foremost Mitt Romney represented the wealthy elite. And exactly the same is true of Barack Obama. To suggest otherwise is either ignorance or wilful self-delusion. It’s almost certainly true that Obama doesn’t view everyone else with quite so much contempt as Romney (see: the 47 percent) and is willing to throw them a few more crumbs, but the fundamental changes necessary to rid America of deep economic injustices are just as far away under an Obama presidency as they would have been under a Romney administration.

Barack Obama: Liberal-lite

When it comes to social policy, there is some clear water between Romney and Obama. And it’s on this subject that the various Obama fans I have spoken to always want to focus. And yes, to return to the gun-to-head-Romney-or-Obama scenario, it’s here that I too would base my decision. Obama’s support for gay marriage is to be welcomed (though his unwillingness to be proactive on the subject is a bit of a cop out). And he doesn’t appear to view women with quite as much disdain as the Republican party – certainly if he does, he’s too smart to blurt out dodgy statements about “legitimate rape”.

But Obama’s presidency to date has seen no attempt to reform drug policy. And given the monstrous incarceration rate in the United States (with most of those in prison for non-violent drug offences) this is not “a minor issue”, as someone described it to me in a conversation. Far from it; this is one of the fundamental human rights issues facing America (indeed the world) right now. The US prison population is disproportionately made up of poor, young, uneducated men from ethnic minorities. The US state is destroying the lives of millions of these people for doing something that – at most – should be viewed as a public health issue, and in a lot of cases shouldn’t be anyone’s business at all. It’s called a “war on drugs” but it’s really a war on poor people (or as Bill Hicks described it, “a war on personal freedom”). And Obama has been fighting that war on poor people just as enthusiastically as any president before him.

And that’s not the half of it. The effects of the American drug war on places like Mexico and Colombia have been little short of devastating. Torture, corruption and tens of thousands of violent deaths… all because the United States refuses to take a rational approach to the issue. Some analysts believe Obama has plans to revisit US drug policy in his second term. If this does prove to be the case, then I have two reactions:

  1. Yay! Well done. Finally!
  2. Hang on, you waited until your second term to do something about this? Presumably because you were worried it might affect your chances of re-election? You spent four years trampling over local democracy by cracking down on popularly-mandated medical marijuana initiatives in your own nation, and watching while tens of thousands died horrible deaths at home and overseas… all because you were worried that to do otherwise would threaten your job security? Seriously? You absolute bastard!

But let’s hope he does something about this insane drug war over the next four years, even if it will demonstrate he’s a typical cynical careerist politician with no moral compass.

Cluster bombs and predator drones

And here, finally, we get to the main reason I felt such a disconnect with the euphoria surrounding Obama’s re-election… the main reason I found that photo of him and his wife hugging so very creepy…

The man’s a child killer. And not just kids. He’ll kill pretty much anyone – man, woman or child. And not just one or two of them either… Barack Obama has ordered the deaths of dozens – perhaps many hundreds – of children. And people are sharing a photo of him hugging his wife? Seriously, I just don’t understand it. So what if he’s better than Romney? He murders children, what the hell are you celebrating!?

I have addressed the issue of cluster bombs on this blog before; but it’s not an issue that can be discussed too often. Handicap International “is an independent and impartial aid organization working in situations of poverty and exclusion, conflict and disaster.” They – along with many other campaigning organisations – have highlighted the role played by the United States in the “production, stockpiling, trade, and use of cluster bombs”. In fact, during the past four years the Obama administration has been hugely instrumental in obstructing international efforts to ban the production and eliminate the use, of cluster munitions. Despite the fact that the use of cluster bombs clearly contravenes several international treaties (including the 4th Geneva Convention and the 2008 Convention on Cluster Munitions), Obama has consistently reasserted the right of the United States to deploy these heinous weapons – weapons which, let us not forget, disproportionately result in civilian casualties (note: the US is a signatory of the Geneva Conventions but boycotted the Convention on Cluster Munitions when it was signed in 2008 and continues to do so).

Only last week UK Foreign Secretary William Hague condemned the use of cluster bombs in Syria citing them as “further evidence of the brutality of the Assad regime.” He went on to insist that “the apparent use of cluster munitions shows an appalling disregard for human life.” I completely agree with Hague’s statement, but I find it pretty weird coming from him of all poeple. While the UK was actually instrumental in setting up the 2008 Convention, it is one of the closest military allies of the nation most responsible for the use of these weapons. Furthermore, Hague’s government – unlike the previous New Labour administration – appears to be quietly backing US efforts to overturn the Convention.

Let’s not be under illusions; any state military or non-state militia using cluster bombs is an enemy of humanity. It’s that simple. Barack Obama – by asserting the US right to use these vile things, and furthermore to actively obstruct international attempts to end their use – is a goddamn monster. When you forward that photo of the Obamas, you may as well be fawning over a photo of Syria’s Assad hugging his wife. Or Saddam Hussein hugging his. Because to knowingly use cluster bombs is to knowingly murder and maim children. There is no other way of looking at that issue. In the murky world of global politics you rarely find a black-and-white issue. Well, cluster bombs is one of the rare ones. And if you think it’s not; then go do some bloody reading on the matter. And that’ll be “bloody” in both a literal and an expletive sense.

Predator droneAnd then there’s the predator drones. Imagine a scenario where the Pakistani government regularly flew remote control weapons platforms over Texas. Platforms that periodically launched missiles at buildings suspected of housing enemies of the Pakistani state. Imagine a large proportion of those buildings also contained innocent civilians; sleeping families, students studying for their exams, average Americans watching TV. Imagine if the US government had issued repeated statements forcefully demanding that Pakistan cease their bombing campaign. Imagine this went on for years.

I’ve heard people argue that “while the number of drone strikes has increased significantly in the last few years, US intelligence is getting better and there are now fewer civilian deaths”. Would that placate the population of Texas, I wonder? “Hey Hank, I know you lost your kids in that last drone attack, but actually the Pakistanis have killed less children this year than they did last year. So chin up, eh?”

Maybe you’re happy with a US president that oversees such a policy. Maybe cluster bombs and drone attacks are cause for rejoicing in your world. They’re not in mine. And they never will be.

And no, Mitt Romney would not have been any better in that respect. He wouldn’t have halted drone strikes. He wouldn’t have signed the Convention on Cluster Munitions. But that just means modern politics is deeply screwed up. If the best we can do is manufacture a false choice between two murderers every four years (or a murderer and a would-be murderer), then we really don’t have much to celebrate at all. I’m glad that Mitt Romney is not the president of the United States. Truly I am. But don’t expect me to jump for joy at the re-election of a mass murderer. And next time you see that victory photo, try to remember that the man with the satisfied smile on his lips also has the blood of children on his hands.

UPDATE: Worth mentioning that I didn’t even get around to Obama’s lamentable environmental record… worthy of a blogpost (nay! a book!) all its own. “Clean coal” my arse!

Note: I had intended to illustrate this blogpost with an image of a cluster bomb victim, but I felt uncomfortable posting such a photo as I would inevitably be using an image of an individual in great distress to make a political point (albeit a valid moral point as well). However, I suggest you do a quick google image search on “cluster bomb injuries” if you are in any doubt about the horrific nature of these weapons. And if you do so, note the high proportion of children… because of the nature of the devices; cluster bombs disproportionately target children. How? Well, they leave lots and lots of shiny unexploded bombs lying around – the kind of things that most adults would know to avoid but which attract the inevitable curiosity of children and toddlers.

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Nov 2012

Sean Quinn jailed for nine weeks

Sean Quinn: looking down on the rest of usIt’s only a few years ago that Sean Quinn was Ireland’s richest man. Today he starts a nine week jail sentence. How the mighty have fallen.

Of course, it’s possible to argue that Mr. Quinn – along with the rest of the “mighty” who helped plunge Ireland into decades of crippling debt – hasn’t fallen nearly far enough. For years, it was impossible to switch on an Irish television without being assaulted by adverts for ‘Quinn Direct’, Sean Quinn’s insurance company and flagship of his business empire. These days… not so much.

All the same, despite his declaration of bankruptcy and his very public fall from grace – and despite the fact that nine weeks in prison is a bit more than just a slap on the wrist – Quinn’s punishment hardly seems sufficient given his part in our downfall. Because while nine weeks is indeed more than just a slap on the wrist, it’s not much more. And surely he deserves much more.

At least, morally speaking he does. Legally? Well, the best the court could do was hand out a custodial sentence for various charges of contempt of court. See Quinn’s real crimes aren’t actually “crimes”. That is – in a world driven into the abyss by a neoliberal ideology little short of psychotic – a shameful cabal of bankers, politicians, property developers and financiers can destroy the very fabric of our nation and yet still not be seen to have broken any laws. So we trip them up on technicalities and get to see them poke their heads briefly behind bars before emerging to a life of continuing luxury. And nor does Quinn’s version of “bankruptcy” amount to worse than a slap on the wrist either. By passing tens – if not hundreds – of millions of euros in assets to family members, despite owing billions to the Irish people, Quinn once again avails himself of a corrupt system set up specifically to ensure contemptible men like him always land on their feet.

Meanwhile the rest of us eye the forthcoming budget with concern as we wonder whether it’ll be the home heating or the grocery shopping budget that will need to be slashed this winter.

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Jun 2012

Paraguay is NOT Uzbekistan

Today, in economic news, Alex Banbury of Hamilton Capital has put together a list of countries’ denials:

“Spain is not Greece” – Elena Salgado, Spanish Finance minister, February 2010.

“Portugal is not Greece” – The Economist, April 2010.

“Greece is not Ireland” – George Papaconstantinou, Greek Finance minister, November 2010.

“Spain is neither Ireland nor Portugal” – Elena Salgado, Spanish Finance minister, November 2010.

“Ireland is not in ‘Greek Territory'” – Irish Finance Minister Brian Lenihan. November 2010.

“Neither Spain nor Portugal is Ireland” – Angel Gurria, Secretary-general OECD, November 2010.

“Italy is not Spain” – Ed Parker, Fitch MD, June 12, 2012.

“Spain is not Uganda” – Spanish PM Mariano Rajoy, June 2012.

“Uganda does not want to be Spain” – Ugandan foreign minister, June 13, 2012.

(stolen from here)

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