2008 was almost the Year of the Digout. Now, it seems, for us and our friends in the United States of Freedom, it's going to be the Year of the Bailout.
Never forget what has happened the past few days. The Irish political establishment, carrying the Greens and Sinn Féin in tow, voted en bloc to provide the biggest welfare cheque in Irish history to some of the wealthiest companies and individuals in the country.
As a Labour Party member, voter and candidate, I am proud of the stance our party took inside and outside parliament on this bill.
I would encourage blog readers to take 5 mins to read what you won't have heard in the mainstream media.
Firstly, take a look at
Michael D Higgins' concise, accurate and crushing analysis. He notes that
the Minister for Finance is describing the external conditions, such as what he calls "the credit crunch" as a kind of international flu. I wish to state immediately that those who want to look at the different models of international finance must conclude that a debate is taking place at present in Washington about how one should respond to the failure and collapse of the neoliberal model of non-regulation.
Higgins also states;
There are matters for which the Government has explicit responsibility. One cannot blame the relationship between the Fianna Fáil-led Government and the speculative component of the building industry on the Washington consensus.
My colleague Michael Taft, who regularly posts on
Irish Left Review as well as his own
Notes On the Front, has a series of insightful articles on the shambolic economics of the past weeks on his blog, chief amongst them
September 30th's entry in the Recession Diaries.
He notes, starkly;
Let’s be clear: these are institutions who have in the past engaged in widescale tax evasion, pursued investment policies that starved our economy and recently have been full and gleeful participants in the lunatic preoccupation of property speculation. And the Government has not just guaranteed deposits but liabilities as well – to the tune of between €400 billion and €500, or up to nearly three times the size of the entire economy.
There are issues of democracy at the heart of the debate too;
This is about maintaining a system whereby the ‘commercial’ (and I use quotation marks deliberately) decisions of a handful of people determine the economic health, welfare and future of everyone in the land. And now these ‘commercial’ decisions are no longer subject to the ‘discipline of the market’ (whatever the hell that might mean anymore), but rather to the largesse of a desperate and pliant Government. No accountability, no oversight, no new disciplines: in my book, if someone guarantees the consequences of my actions, then I can have no complaint when that someone rightfully demands accountability over my actions; and extracts a fair price. But not here, not in Fianna Fail-land.
Michael's conclusion, which I quote below at length, shows just how far things have got;
No one questions the need to keep banks afloat. To say that markets need capital is an insulting tautology. The issue here is on whose terms – the bankers or people, business, the economy. That George Lee, not known for spouting demands for the nationalising the commanding heights of the economy, pointed out that the Government could have bought half the four major banks for a cool €5 billion, suggests that taking the route that US and European authorities have taken is not so far-fetched. That capital injection would have provided much-needed liquidity and would have given the taxpayers a real stake in these institutions. This, then, could have been followed up with not only guarantees but an intervention in the investment practices themselves, specifically a redirection of 1% to 2% of banks lending portfolio into Enterprise Development Funds which would finance our indigenous base (this would have won support from huge sections of the business community).
Something like this would have been a rational approach. But it would have involved a socialisation strategy that is anathema to the Right. So what we get instead is capitalists without the capitalism, capitalists with a big fat welfare cheque, capitalists who are not allowed to fail no matter how unworthy their efforts. This is the system we are paying to save.
Extraordinary. And don't forget who is giving the bailout to their banking buddies, who is responsible for an inflated economy, whose connections to builders and speculators are now causing pain to hundreds of thousands of working people, and whose economic system has been proven for the house of cards it truly is.
There is an alternative, and it isn't to be found in Tweedledee to Tweedledum, or Podge to Rodge. Labour's
plan for the economy is here.
