A call for action and leadership
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Never in the course of our recent history has so much been needed by so many, from so few. The problem for us is that most of the few have gone on holidays.
The Dail went into recess last Thursday, 24 hours ahead of a Black Friday of huge increases in electricity and gas charges, and yet another stock market collapse.
It is not our purpose in this newspaper to darken the clouds of economic gloom that hang over us. We believe that the Irish are never better than in adversity and that, if government shows real leadership, our people will not be found wanting.
We are, it's true, caught in the economic cataclysm that has hit the developed world, but this dreadful cycle will, in time, come to an end, though nobody can say when.
In the meantime, it is our duty to do everything to navigate our way through this storm with as little damage to our national interest as possible.
Nobody is an island, and the troubles of America's two biggest mortgage lenders, Fannie Mae and Freddie Mac, which have lost $11bn in the past few months, affect us all.
It is deeply regrettable, however, that the Government's response last week to the crisis was not only tunnel-visioned, cautious and civil-service driven, but downright irresponsible at a time when 10,000 jobs a month are being lost. There was nothing to suggest that the Government, or its civil service, either comprehends or accepts the depth or likely length of the economic crisis. People are fearful and their mood will turn to anger.
And they will be right to be angry, having seen the Dail leave much of the private sector to its fate after applying a Band-Aid to the fiscal wounds in the public finances.
The opposition is no better. Last week, as it engaged with the government in a debate about exchequer spending-cuts, one sensed that it, too, was merely filling in time before its departure until the autumn.
Not a radical idea was in sight. Not a scintilla of evidence to suggest that the government sees any need to kickstart, with temporary and emergency measures, those parts of the economy that are fast disappearing into a black hole. The political mindset seems to be that we all enjoy the security of the public sector, when patently we do not, a plain fact that will become ever more painfully obvious as the dole queues get longer.
Politicians and the civil service seem impervious to the cries of distress coming from the construction sector, from large areas of retail, from parts of manufacturing and service, from hotels and tourism, as the ripples of disaster spread ever wider like a silent and insidious contagion.
Sagacious talk about things that were unsustainable and about necessary corrections is no more than platitude. The market value of something is what you can get for it, whether it be a Francis Bacon painting or a gramme of gold. In that sense, most traded things have an element of sentiment and confidence in the price struck.
When bubbles burst, whether they be builders' or banks', everybody feels the pain, because we are all interdependent. Many people's pension provisions have been affected by the fall in bank and other shares. The bell, indeed, tolls for us all.
The crisis will, it is true, come to an end, but there is not a single economic indicator at present that shows us a light at the end of the tunnel.
It might be worth remembering that when World War 1 began, conventional thinking was that it would all be over by Christmas, 1914. So much for sagacity.
The onset of the recession was, however, eminently predictable. Mr Cowen and Mr Lenihan, having risen to the highest offices the country, have given the impression that they opened the books and were shocked by what they saw. Apart from the fact that Mr Cowen was Finance Minister for the past four years, rarely can an economic collapse have been as well signposted as this one was over the past 18 months.
Were our leaders sleepwalking? Or in denial? Or in that surreal place, planet politics, occupying themselves with issues like Bertie and Lisbon, while during that very period the economy was plummeting?
The fiscal corrections announced last week are, even on their own terms, too little and too late.
Tax revenues are falling rapidly, and social welfare spending is rising as unemployment grows.
The budget deficit has to be addressed, of that there can be no doubt. But we need leadership, vision and radical action, too. And so far we have had none.
In a spirit of deep concern and humility, we suggest the following, among proposals worth considering:
(1) we should be allowed to break European Union borrowing limits in our own national interest;
(2) stamp duty should be abolished;
(3) the National Treasury Management Agency should be allowed to assist in re-capitalising the banks;
(4) pay talks should be suspended for a year and an 18-month public-sector pay freeze announced;
(5) quangos should be closed down; and
(6) the National Development Plan should be prioritised and pushed ahead.
-- The Editor
