Thursday 19 September 2019

Gene Kerrigan: A young person's guide to the recovery

The young are advised to blame the old, or the unemployed, for the betrayal of a generation, writes Gene Kerrigan

The Recovery position
The Recovery position
Gene Kerrigan

Gene Kerrigan

Hi, young people of Ireland, welcome to the recovery! Isn't it just wow!

You're coming into this movie halfway through - so I thought it might be useful to point out a few of the major plot developments you've missed.

First, a recovery is not a destination. It's a stage in a cycle - boom, bust, recession, recovery, boom, bubble, collapse, recession, recovery... and on and on.

We're all assigned a role in the drama - and your role, right now, is sucker.

You could be lucky - with a unique talent or a rich parent - but probably you're like the rest of us, trying to match your skills and passions to the needs of a ruthless and ever-changing market.

Last week, David McWilliams had a documentary on TV about you young folk, the millennials. But David thinks that's an irrelevant nickname, so he calls you the 'Crash Kids', because your lives are currently defined by the aftermath of that nasty business in 2008 that we try not to speak about anymore.

McWilliams asked a pertinent question: whose recovery is it?

Because, on the face of it, it's a bit of a puzzle. Champagne corks are popping, and so are the politicians and entrepreneurs. And we hear again that familiar collective whooooosh of the financial sector hoovering cocaine up its nostrils.

Yet, just yards away, we've still got people dying as they wait on hospital trolleys. And teachers are asking kids to bring in toilet rolls, because the schools can't afford to buy them.

People in their late 20s and 30s live at home, because a mortgage is out of the question. Landlords demand Fifth Avenue rents for squalid dog boxes.

To know whose recovery it is, it helps to ask whose boom it was, and whose collapse.

Before the Celtic Tiger, it was carefully explained to us by the financial experts that we couldn't afford luxuries - hospital beds and the like. We just didn't have the financial resources.

A large number of our primary pupils were educated in prefab huts, because we couldn't afford to build proper schools. Class sizes had to be gigantic, and damaging to the kids' education, but that was just the way it was. We had to cut thousands of beds out of the public health system (to half the OECD level) - but, sure, what was a poor little country to do?

Major plot point coming up.

If things like hospital beds have to be cut in the bad times, they can be afforded in the good times, right?

Not quite.

In the bad times, the financial experts explain, we must be "prudent" in order to encourage a recovery. And in the good times, we must practise "restraint", lest we ruin the recovery.

So it was, throughout the boom, some of us continued to whinge about the shanty huts in which our kids continued to be educated. The hospitals continued to deteriorate, to the state they're in today.

Rule: boom or recession, the people who matter get their larger-than-feasible share of resources.

From the 1990s, the share of rewards for those who live on rents, dividends and executive pay began to stretch away from the rewards for labour. The average executive is now paid 33 times what the average worker gets.

During the last boom, speculators, land hoarders, bankers and a swathe of hustlers developed a finely tuned culture of grab-all greed.

Hey, wait a minute, said those of us not entirely convinced by the logic of the free market.

And the financial experts explained to us that we had to pay immense amounts to the people at the top, because they're the "rainmakers", without whom there wouldn't be such magnificent harvests.

To that, we answer with three names: Drumm, Goggin and Sheehy.

In 2007, David Drumm was paid €3.2m; Brian Goggin was paid almost €4m; and Eugene Sheehy was on a measly €2.4m. These were the CEOs of Anglo, Bank of Ireland and Allied Irish Banks, who presided over the policies that led to the collapse of their own banks.

They were living proof that the immense rewards for the people who matter don't reflect the outcome of their work, or their role in society. It's their place in the pecking order that counts.

It was my habit, at Christmas during the recession, to check out the Luxury Hall in Brown Thomas. There, you could buy Annoushka earrings for €25,000, a watch for €22,000 or an iPad cover designed by Posh Spice for €895. If you were a bit hard up you might buy just a Tom Ford keyring (€200), or a hand-embroidered cushion designed for your dog to sleep on (€145).

These things sold. They sold before the recession, during it, and they'll sell during the recovery. Luxury stores don't stock such stuff for our amusement - they sell it to people with too much money and too little taste.

Golden rule: before anyone gets anything, the people who matter, who earn from rents, dividends, bonuses and executive pay, must rake in their preposterous share.

One-third of all income goes to the recession-proofed top 10pc. They took a genuine boom created by the hard work of the many, and in their greed they destroyed it. It was our boom, hard won. And their collapse.

Young folk - I know because I was one - typically see a government as a kind of social referee. Not so. The Irish Times looked up the register of TDs' interests and reported "more than a quarter are landlords".

Most TDs are entirely admiring of the people who matter. Logic said that when we had a recession, and private capital was effectively on strike, the State should stimulate the economy. Instead, we got years of austerity, that slowed economic recovery and damaged countless lives.

Now, as the recovery grows, there are stirrings recognisable by those who've been through this before. We've had the "financial experts" feeding easily impressed journalists material that claims we're "a welfare state". This recently produced a minor panic.

Oh my God, the budget for Social Protection is €20bn. Sounds reasonable, actually.

This is social insurance (renamed "welfare", to make it seem like charity). We all pay small sums - in direct and indirect taxes - as insurance against days of need. It aids children, carers and others who were, or are, or will be productive. It allows the temporary adjustments in employment and routine social changes without which the workforce would be in disarray, with dire economic effects.

About four out of 10 payments are pensions; three in 10 are for the unemployed, disabled or ill.

It's well within our economic reach. Those benefitting are not them, they are us, as our lives unreel in various stages. Propagandists say otherwise.

They divide us, in their own interests. Now they're trying to set one generation against another.

Ibec, the rich folks' lobby group, employs 230 people, on a €27m turnover, to push their agenda. At least, they're open, we can see them at it. There are others.

So, welcome, young people of Ireland, to a recuperation period in a social arrangement in which you're promised vast riches, in the unlikely event you manage to get higher in the pecking order.

Otherwise, you'll be sent for if needed. Expend your anger on mythical "shirkers" (they're talking about your granny and your nephew who was made redundant and is now retraining). Or on raging against older people who worked for the pension on which they now survive.

Above all, don't look behind the screen, where the lobbyist and the politician prepares material to impress the journalist.

Sunday Independent

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