Friday 28 October 2016

What Michael Noonan doesn't realise: it's not just about the economy, stupid

The Finance Minister may have come to believe his own hype but he has let inequality threaten economic recovery, writes Jody Corcoran

Published 03/05/2015 | 02:30

Michael Noonan
Michael Noonan

Poor Michael Noonan - last year, his budget was forgotten in the welter of controversy to do with Alan Shatter; this year, his Spring Statement has been overshadowed by the fallout from his liquidation of the bank that broke the country.

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And the man presented as a living legend in his own lifetime, for implementing a programme of austerity that Fine Gael vowed it would not implement, is not happy.

Noonan is that old-fashioned politician, convinced the public can be won over by a faded rhetoric - it's the economy, stupid.

The phrase was coined by political strategist James Carville for the successful Bill Clinton presidential campaign in 1992.

But it is not just about the economy. If you don't believe me, believe Carville, and if you don't believe him, believe Peter Mandelson, both of whom know how to win an election. And that, after all, is what Michael Noonan's outrageously over-hyped statement is all about - winning the election.

Carville had three messages for the Clinton core team that day - one of which was the economy, stupid - but the other two are more relevant in this day and age, if less catchy.

This is what he also emphasised: "Change versus more of the same" and "Don't forget health care". And here is what Mandelson had to say, in a more recent letter to the Financial Times: the traditional "electoral levers and buttons" are not working as they have in the past. The establishment has to come to terms with that; a "jaded and cynical electorate" wanted to hear "something different and more radical", he said.

Noonan is a traditional levers- and-buttons man, the master of homespun political philosophy wrapped up in a sound bite, or if you prefer, a bit of spin, what you might call auld guff.

At this stage, Paddy knows the story: a few quid in the pocket - grand, thanks. But, what about real change in how things are done, not just the hollowed out overuse of the word change. And don't forget the health service.

Our living legend of a Finance Minister doesn't seem to get the full picture, so he snarls "get off the stage, get off the stage now" and makes a tetchy remark about (un)published reports when his status as a living legend is dared to be questioned.

This is the man who has introduced four regressive budgets in a row, after all, and shows every sign of bringing in a fifth.

And he wonders why many people, spitting the bitter aftertaste of almost a decade of austerity, are not as grateful to him as he feels entitled to expect.

Get off the stage, Mr Noonan.

And the consequence of those four regressive budgets? Ever-greater inequality, of course. The inequality debate is no longer confined to the dinner-party chats of left-wing sociologists - 'oh, isn't it terrible'. The level of inequality here has become a clear and present danger to economic recovery, an issue that will be among the decisive factors in the election outcome.

Eighteen months ago, the Mayor of London, Boris Johnson, an old- school conservative, proclaimed that "some measure of inequality is essential for the spirit of envy and keeping up with the Joneses that is, like greed, a valuable spur to economic activity".

So far, so predictable, and in its own way, not without a level of merit - but Johnson has been on the campaign trail these past few weeks and has been forced to revise his arguments by what he has seen, or more likely heard, on the doorsteps. He now fumes that the current gap between rich and poor is "outrageous"; the wealth gap allowed to get "too big". It is an issue the Mayor of London is reported to have sought to address by promoting the living wage.

In Ireland, one in five people earns less than the living wage of €11.45 an hour - the income below which it is impossible to make ends meet.

James Carville's axiom was never more relevant: change versus more of the same. The Spring Statement offers more of the same. That is the problem.

There is no new vision, big idea, or guarantee that would see a sustained reversal of reckless inequality. In fact, change was nowhere to be found - just yanks of the old levers, pressing of the old buttons. Throw whatever money is available - which is not that much - to buy votes again; and, it must be said, some people show every sign of being easily bought off.

Brian Cowen may have been wrong about a lot of things - particularly wrong when his government failed to act quickly or appropriately when the crash hit in 2008, as this newspaper was widely criticised for stating at the time.

Last week, political analyst Jack Tchrakian faulted the Cowen government for imposing cuts and hikes on the same model that had grown up during the years of excess.

The current Government adopted a 2:1 ratio model on spending cuts and tax hikes, twice as much saved in cuts. Last week, that model was changed. Now, the ratio is 1:1, which is great - more money in the pockets of voters, stupid. But it is no more than a yank on the lever.

The Spring Statement betrays a belief that people will be satisfied with dinner out and a few pints at the weekend - whatever their bellyaching about medical-card cuts or cuts to the carers allowance or respite grant and all of the rest of it.

But Brian Cowen was right about one thing in London last week, when he refused to accept the criticisms of those who had condemned his actions as too miserly. "When I was producing those budgets, go back and look at what people were saying. I was described as Ebenezer Scrooge," he said. I've gone back and checked. He is right.

The same mentality lives: take the Labour Party, which needs to win back the public sector. The Government has €1.5bn to spare - €750m earmarked to reverse or start to unravel the worst effects of austerity. Last week, the Government let it be known it was prepared to increase public sector pay, across the board, by between 2-3pc and before summer - at a cost of around €350m (gross). Bravo! No more whingeing about hospital trolleys, then.

The public sector has had it tough, particularly those at the bottom end and those recruited in recession - nurses and teachers - sold out by their colleagues. But so has everybody had it tough, the vast majority of workers, public or private, at the middle and lower end.

For those who earn a living wage or a little more or less, tax cuts and pay increases will be welcome - but on the whole, Paddy has learned a hard and bitter lesson: it's not just the economy. It never was. It's everything, stupid, the evidence all around, in our schools, in our hospitals, in our lives.

Sunday Independent

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