Saturday 27 December 2014

Eoghan Harris: We need to break free of the rogue elephant before it crushes recovery

Published 23/09/2012 | 05:00

In times of confusion and crisis we need clarity. The first step is to list core convictions. Here are 10 things I believe to be true about the current crisis.

1. I believe that the coping class is close to collapse and that the next Budget could begin a breakdown of civil society.

The slow piling on of new taxes can be compared to the barbaric punishment called peine forte et dure (hard and forceful punishment). The victim was laid beneath a door and heavy stones piled on until the poor wretch suffocated.

Legend has it that the last brave words of one Giles Corey, who died during the Salem Witch trials, were "More weight". But we are not so brave, nor can we take more weight. Like the property bubble, the dismal drip of new taxes has come to seem normal -- but it too will end in tears.

2. I believe that every party has one article of faith -- but that this forms its prison. All parties are prisoners of the most flawed article of faith -- the Croke Park Deal.

The bank debt is barely manageable. But the public pay, pensions and perks bill is beyond bearing.

We have to choose one or the other, but we cannot service both.

All parties pretend that Croke Park is a sacred cow Actually, it is the rogue elephant in the room.

And in an economic version of peine forte et dure it is suffocating the Irish people.

3. I believe that public sector pay should not be cut. Instead, the pensions and perks should be ruthlessly reformed.

My belief that public sector pay should not be cut may come as a surprise. But I am still a social democrat. Any cut at this stage would cause too much suffering for families who have made commitments.

But public sector pensions are a scandal. Here, reform should be ruthless. Politicians must take a major cut in pensions and claw back some of the more obscene pensions already paid by means of new income tax measures.

Naturally, the political class will say this cannot be done. They would, wouldn't they? Anything can be done if there is the political will.

4. I believe that RTE is distracting us from the core issue of public sector debt because it is itself part of the public sector.

Every second night RTE News sends Michael Noonan busking around Europe. Then it forgets his forlorn figure.

But of course there are no cameras when he flies back with sweet Fanny Adams.

Newstalk's breakfast and lunch shows are now the only reliable radio reports on the continuing crisis. Last week we got the goods on allowances from Shane Coleman and Chris Donahue -- the latter performing a marathon of memory by memorising scores of sweetheart deals.

5. I believe that all academic commentators on Croke Park should be introduced with a health and safety warning.

The reason is simple. All third-level academics are paid from the public purse. This is bound to colour their approach to all public sector issues.

The same is true of commentators who rely on RTE patronage. Recently I reached the conclusion that only three pundits can be trusted to tell the total truth about the public finances: Ed Molloy, Ed Walsh and Eddie Hobbs.

6. I believe that Fine Gael betrayed the coping class by going into Government with the Labour Party.

Enda Kenny made it worse by dodging the dire decisions at the start. He broke the rule known to every good teacher. Start tough and slowly soften and the students will love you. Start soft and slowly toughen and they will hate you.

7. I believe the Labour Party lost all political and moral authority by going into government, becoming a prisoner of the public sector unions and surrendering the private sector class to Sinn Fein.

The Labour Party's defence of Kevin Cardiff signalled that it would defend even the weakest link in the public sector chain so as to secure the public sector vote. That decision marked the death warrant of the Labour Party.

Labour's political policy is to look after the Alex Whites in the public sector constituencies of South Dublin, leave the private sector working class to Sinn Fein and continue as a very minor party in Government as long as it gets the gravy.

8. I believe that Fianna Fail's support for Croke Park has finished it as a political force.

Fianna Fail, like the Labour Party, has decided to look after the minority public sector class at the expense of the majority private sector class. It will get no gratitude.

The Labour Party now owns the public sector vote. Although that's like owning a Rottweiler with a record, Fianna Fail still stupidly lusts after that dangerous dog.

9. I believe Sinn Fein is the only opposition party with something like principled policy on the current crisis: to hit the top of the public sector and to increase income tax.

This is a bitter pill for me to swallow. But I always try to be loyal to the facts. And Sinn Fein alone is calling for the only progressive measure that can siphon off surplus from private and public sector fat cats -- an increase in income tax.

Currently, the three main parties claim to accept Sinn Fein's credentials on the peace process but dismiss its fiscal policies as voodoo economics.

Actually, the reverse is true. Sinn Fein still has voodoo politics on nationalism, but it has at least one progressive economic policy: increasing income tax.

Fianna Fail should long ago have done what Labour can no longer do -- stolen Sinn Fein's clothes by calling for one clean increase in income tax. That way we would know the worst and be able to budget properly.

From that would come the confidence to consume and spend -- and thus invigorate the dying domestic economy.

10. I believe that the Irish Government should give Germany and the ECB a reality check by reminding them how Hitler came to power.

Germany is making the same mistake with weaker countries as the Allies made after the First World War , when John Maynard Keynes warned: do not beggar your neighbour.

Accordingly, the Irish Government should run a gritty campaign calling on the ECB to take up bank debt of all struggling EU economies and export it to the far future in the form of debt bonds.

* * * * *

Credo complete, here is a a plug for Clifden Arts Festival, where I will be giving a light-hearted talk with the working title 'Life Gives You Law But Movies Give You Justice' at 11am next Saturday, September 29, at the theatre beside the Station House Hotel. And I will also be talking about it to Sean Moncrieff on Newstalk on Monday at 1.30pm.

* * * * *

A final sad note. Last Thursday, after attending the service for the removal of the remains of Jean Wrigley, the late beloved wife of Stephen Collins, I walked the west pier and stopped to watch the loving necking of two swans who had mated for life. Stephen and Jean were swans. We who admire him as a man and a writer can only guess at his grief.

Sunday Independent

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