Wednesday 20 November 2019

Gene Kerrigan: Hooray! We're back on track -- again

The austerity agenda is now so entrenched that alternatives can no longer be heard, writes Gene Kerrigan

WHAT did you think of the Unctad Report? Interesting, right? Obviously, as a concerned citizen in a deeply troubled country, you've paid close attention to what the United Nations Conference on Trade and Development had to say about us last week?

No? And why not?

I mean, I don't expect you to read the whole 190 pages, but it was all over the newspapers. The Daily Telegraph, Guardian, New York Times, Sydney Morning Herald.

Perhaps you don't read those newspapers? That would explain it.

Search for Unctad in the websites of The Irish Times, Irish Independent and Irish Examiner -- nothing.

The RTE News website carried a Reuters story on the Unctad Report, but short of listening to every bulletin I can't tell whether that story made it to air. I don't recall the chatty shows being abuzz with news of the report.

Instead, the media was awash with news of the ESRI Report. And, guess what? The ESRI said the Government's austerity policies were a roaring success. Yippie. The ESRI is so -- eh -- dependable.

Apparently, according to the ESRI and its media fans, we're almost "back on track". The phrase trilled repeatedly from the radio and TV. What does "back on track" mean?

Well, it doesn't mean that unemployment is coming down and it doesn't mean there's any end in sight to the savage cuts that make citizens despair. "We're back on track" is the new "We've turned the corner".

It's the meaningless phrase used to reassure us that these people know what they're doing -- despite all the evidence.

Later in the week, the media gleefully reported that the EU gave us a nice mark on our "report card". Unfortunately, this wasn't for good news on unemployment or the State finances. It was for being obedient little boys and girls and following orders.

(And, yes, this is the same EU that risked political meltdown this weekend, after a shock

resignation followed a row between a bunch of witless ECB banking bureaucrats about the finer points of their chaotic and obviously failing policies.)

But what did the Unctad people say? What was it that the world's leading newspapers thought merited coverage, but which no Irish newspaper thought worthy of our attention?

Well, the secretary-general of Unctad, Supachai Panitchpakdi, a former head of the World Trade Organisation, said: "The message here is very pragmatic, we need to reverse our course quickly."

He said the currently fashionable austerity policies were "misconceived and inept". And that they would, at best, lead to a decade of global stagnation.

Or worse. And they're not fans of the policies being forced on this country. The lead author of the report, Henier Flassbeck, a German professor of economics, said: "If governments stick to the policy of not only keeping fiscal deficits where they are but retrenching, cutting public expenditure, then we will end up in permanent recession."

Enda Kenny's Government, in collaboration with "our external friends", is obsessively targeting the deficit, regardless of the consequences for employment, for indigenous small business or for growth. And without domestic growth, we're in for permanent recession.

We've had three years of this, essentially transferring a massive debt burden from the European and Irish banks to the shoulders of the citizens -- and then attacking the sick, the handicapped, the elderly, the unemployed and the low-paid to pay for it.

Reuters quoted Unctad calling for "wage increases, stricter regulation of financial markets . . . and a conscious break with market-led thinking".


The report points out: "A national economy does not function in the same way as an individual firm or household. The latter may be able to increase savings by cutting back spending because such a cutback does not affect its revenues."

However, state cutbacks have a "negative impact on aggregate demand and the tax base will lead to lower fiscal revenues and therefore hamper fiscal consolidation".

Result? "An improvement in the immediate cash flow of the government, but with negative consequences for long-term fiscal and debt sustainability." Plus high unemployment and socially unacceptable income distribution, since the weakest are hit hardest.

The next time you hear a politician or one of their pet economists make comparisons between a household budget and the State budget (they love that kind of folksy nonsense), you can assume that they're talking through their rectal fistitude.

Meanwhile, next Thursday, Enda Kenny's Government will pay €1.5bn to gamblers who in 2006 loaned that money to AIB in the hope of making a killing in the property bubble.

These are unsecured bondholders. They gambled, they lost, but they want their money back. And since AIB can't pay them, we're being forced to.

And this month alone, Enda Kenny's Government will pay a total of €4.3bn (€4,299,705,436, to be exact) to similar gamblers -- at the insistence of the IMF/EU. The Government will borrow that money and shortly afterwards Mr Noonan will bring in a Budget that will seek to save up to €4bn in cuts and tax increases.


Now, the Unctad people might be right, they might be wrong. I think they're right, but then what do I know? But you'd imagine the fact that Unctad is attacking the underlying policy of this Government, of the IMF and the ECB, was of some news value.

But the business reporters and specialist correspondents, who guard the news portals and decide what gets on to the national agenda, don't think so.

Perhaps they didn't know? Hardly. Last Monday, The Irish Times business section of its website gave a heads-up about the impending release of the report.

Did the media conspire to suppress the fact that there is another side to this argument? No, I don't think so. But you've heard of TINA, haven't you? There Is No Alternative?

The austerity culture is now so deeply etched into the consciousness of the elite -- in politics, economics, academia and the media -- that anything said outside the TINA agenda just doesn't make sense to them. It's the same herd mentality that unthinkingly boosted the Celtic Bubble.

(The Unctad Report, by the way, carries very convincing arguments on herd behaviour -- rational and irrational -- in the financial and commodity markets.)

The figures above mostly come from Bondwatch (to find it, google bondwatchireland). It's a blog that in very stark terms outlines the detail of the money being extracted from us -- the debt being loaded on to us, our children and their children, to pay other people's gambling debts.

Next year, Mr Kenny's Government will load us with another €20bn in debt to pay off the gamblers. And by 2015 we'll generously pay a further €60bn of other people's gambling debts. And, no doubt, the EU (if it still exists) will pat us on the head again.

Bondwatch was set up by Diarmuid O'Flynn, a sports journalist with the Examiner. He's part of the courageous protest over the past few months in the Cork village of Ballyhea. Carrying a banner saying: "Ballyhea says no to bondholder bailout", people have been mounting a dignified, persistent protest against what's going on.

When the history of this ignoble little era is written, Ballyhea will be a byword for honour.

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