Saturday 27 December 2014

Gene Kerrigan: Rich have been left alone for too long

Don't hit our students and pensioners, let the wealthy take some of the pain this time, writes Gene Kerrigan

Published 16/09/2012 | 05:00

Have you ever seen one of those nice but slightly unhinged young people who turn up on YouTube from time to time, defending some celebrity or other? The most famous is Chris Crocker's "Leave Britney Aloooooone!", but you can see them sticking up for other favourites in trouble.



Teary-eyed, face flushed, looking straight into the camera, they bubble up towards hysteria and beyond, but their sincerity is undeniable. They have grown up in a world in which celebrities are part of the landscape, as real and as loved as their cat or dog. To see an idol being monstered by the media is like seeing Rover being kicked in the ribs.

Any day now, Brian Hayes TD, our Minister for Attacking Pensioners, is expected to make his own video, for the Fine Gael website, in which he will explode in unrestrained defence of the rich. Teary-eyed, face flushed, looking straight into the camera, he will bubble up towards hysteria and beyond -- "Leave the rich aloooooone!"

Brian's sincerity will be undeniable. Likewise the sincerity of those other defenders of the rich, the Fiscal Advisory Council.

We are ruled by the children of Ronald Reagan and Margaret Thatcher. People who wouldn't consciously subscribe to Thatcherist politics but who were formed by them. Those publicly minded young folk who saw, in their mid or late 20s, the brave new world of neoliberalism rule triumphantly, under Thatcher, Major and Blair. They watched as taxes on the rich were cut, the finance business mushroomed and deregulation freed entrepreneurs to shape the world in their image.

They were breathless with admiration as the Ahern and Cowen governments championed the rise of light-touch regulation, they cheered each "incentive" for the "wealth creators".

They believe in the tenets of that neoliberal creed as wholeheartedly as they believe in gravity.

And those tenets still underlie every policy, every thought, as they grapple with the crisis.

Above all, they retain the semi-religious belief in the need to keep the rich coddled, to incentivise the hell out of them and to hope that this will lead to growth, which will lead to recovery -- as the wealth trickles down to the rest of us.

There have been token cuts for the rich, but no one over €100,000 a year has felt real pain, while others have been deeply afflicted. And there are people who look askance at being offered €200,000. Bankers have complained that €500,000 isn't enough.

It's government policy to leave the rich aloooooone! In the hope they'll create jobs.

Brian Hayes says: "It's crucial that we do not increase tax on income further." He doesn't mean you and me. They've got all sorts of taxes, in the shape of charges, to bleed us dry. They mean that top marginal tax rates that affect the rich must be held down.

Brian and his fellow travellers need to take an evening course in basic capitalism. Jobs are not created by voluntarist investment by philanthropic rich folk. Private sector jobs are created out of market demand. Market demand rises from the disposable income and confidence of the mass of the people. And their austerity policies have sucked both money and confidence out of aggregate demand.

(Public sector jobs can be created by state investment, as a stimulus measure when investors are on strike, but that won't ever be done by Reagan and Thatcher's children -- it's against their neoliberal religion.)

Their cuts have hit the blind, the sick, the poor and the dying. No one is spared real pain, except the rich. Professor John McHale of the Fiscal Advisory Council warns that the "marginal tax rate is 52 per cent".

Aw, gee. Those poor rich guys.

Know what the top marginal tax rate was in the USA in 1929, when the crash happened? It was 24 per cent. Three years later, in the midst of the depression, it was 63 per cent. By 1945, it was 94 per cent. And, you know what it was on top incomes through the 1950s and right up to 1964? Around 90 per cent. Right through the most sustained era of prosperity in American history.

Then it came down to 70 per cent. By 1980, when Reagan arrived, it was 50 per cent. When he left eight years later, it was 28 per cent. That's when the bizarre low-tax, light-touch regulation experiment began. It ended in 2008, with an almighty crash -- as the crazies left behind them a mountain of debt that can't be paid off.

Over these past few days, the Government has been flying a kite to see how hard they can hit pensioners.

Item One: Brian Hayes says many pensioners are "well off" and it's their adult children who are in trouble. Such pensioners must be asset-stripped, "not in a hairshirt way", he said, but rather in a "sensible" manner.

Item Two: The Irish Times weighed in with an article titled, "Punishing the young for the sins of their elders". It condemned "massive intergenerational inequity" and says: "The young have already been burdened with the massive national debt run up by their profligate elders. As if that was not enough, they are also facing a lifetime of lower salaries and far inferior pensions than the generation who crashed the economy into the rocks."

Item Three: Details were leaked to the Irish Independent of the planned attacks on pensioners. End free travel, free TV licence, electricity, gas and phone allowances. These are kites, flown to gauge reaction.

Now, it wasn't a generation of "profligate elders" that crashed the country. It was very rich people, spread across the generations, gambling in an effort to rack up even greater hoards of money. The greedy bastards who ran up reckless debt weren't a generation of pensioners. The stupid gobshites who presided over all this and gave it their blessing weren't pensioners.

The Irish Times cries strategic tears for the young, burdened with lower salaries and inferior pensions -- and when it was required, the Irish Times campaigned to asset strip those salaries and pensions.

The elite are testing the waters to see if they can get away with attacking pensioners. And Hayes also flew a kite about cutting the numbers of those receiving education grants -- to see if they can get away with attacking the least well off among students.

It won't be enough for pensioners to resist being made pay for other people's greed. It won't be enough that students resist being made pay for other people's greed. Both need to beware being set against each other. The best way to do that, link the resistance. No, you're not chopping us -- and, no, we won't stand for you chopping them, either.

It would break Brian Hayes's little heart if he thought those who reaped disproportional rewards from the boom were to be hit with disproportional taxes. They, of course, bear disproportional responsibility for the crash. By definition, it was not the low and medium paid who gambled recklessly.

That snivelling sound you hear, it's Brian, as the tears bubble up. Leave the rich alooooooooooone!

Sunday Independent

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