It's only a week since I wrote my previous blog post, and depressingly it seems like its already far out-dated. In that post I wrote how the Government had denyed everything that has happened thus far in the recession – however, even in my most cynical of minds I never thought that they would try and deny that an EU/IMF bail-out was taking place when it actually was. But no, that realisation was confirmed on the radio yesterday morning by the Governer of the Central Bank Patrick Honohan – that's right, not our elected leaders, but an unelected (if decent) civil servant.
The most depressing thing about this bail-out for me is that I've had to try and piece together what's happening from a different country, with the Internet as my only tool. I saw on the BBC website that Ireland was negotiating a bail-out, while at the same time RTE were denying the story. It appears that this citizen living hundreds of miles from Dublin is perhaps even better informed than a person actually living in the country ! But I can't get away from this story – it is in the front pages of French papers as well. I even had a French friend today mocking me about it, saying that they'll be the ones bailing us out. I couldn't even argue with her. It's interesting to note that it's almost exactly a year since the Thierry Henry hand-ball incident – how our priorities have changed since then.
When I left Ireland at the start of September for my year abroad on Erasmus I never thought in my worst nightmares that we would end up at this stage. Sure things were bad, but I still remembered the heady days of the Celtic Tiger and thought that there was no way would we end up like Greece or Iceland. Previously, I thought that the IMF was a hypothetical tool that was used by neo-liberal puppets to call for more cuts to social welfare, health, education etc. Now they are here, occupying the Central bank for negotiations. It's only since I've come and lived in a foreign country that I've seriously thought about the future and the possibility of emigration. It's now looking like emigration is a probability.
Look, I fully expect people to fuck up – its a natural human trait to make mistakes. Sure my party Labour have made a bundle, from entering government with Fianna Fail in 1992, to the Mullingar Accord in 2007, and promising to cut taxes in that election. However, what I cannot stand from this government is that they make mistake after mistake after mistake and deny all responsability. Even worse, they deny that they have made any mistake in the first place! The lies, spin, deceit and downright treachery displayed from this Government in the last few weeks has surprised me, when I thought I couldn't be surprised by anything FF did anymore. In this crisis we have heard FF lay blame on everyone but themselves - Lehman brothers, independent economists like McWilliams and Morgan Kelly, the media. It appears that the public aren't buying it anymore – I think we saw the start of this on Primetime last night with Pat Rabbite's passionate tirade against Pat Carey, and Fianna Fail in general. Everyone on Twitter, Facebook and forums seemed to agree that Rabitte spoke for every citizen of this country last night – the anger was palpable. It seems like we are mad as hell and not going to take it any more. I'll gladly bring the French fighting spirit when the protests properly start.
Friday, November 19, 2010
Wednesday, November 10, 2010
Divide and Conquer - the Shock Doctrine in Ireland
As you can imagine, living in a tiny apartment in a foreign country with no access to a television, internet or even a radio can lead to intense boredom. It was during one of these bouts of boredom that I decided to go for a stroll through Paris, not really aware of where I would end up. I found myself next to the Notre Dame and remembered that there is a famous English language book-shop right across the river – Shakespeare & Company. It is a favoured haunt for novelists throughout the world, who head there with the promise of free accommodation and meals, in return for their artistic output. Being somewhat of an idealist, I appreciated the efforts of this romantic purveyor of charity and fully intended on supporting this establishment by buying a book.
It turned out better than expected – there was a book reading from a renowned travel writer, as well as some wine-tasting after. How so very French! Determined to keep my promise, I bought a book that had been previously recommended to me by a friend – The Shock Doctrine by Naomi Klein, the author of a previous bestsellet No Logo. I'm sure a lot of you have read The Shock Doctrine, and will have your own opinions on the book (no doubt depending on what political spectrum you hail from) but what I would like to outline is its relevance in Ireland today, and the adherence by some sections of the Irish media and political establishment to implement 'shock therapy' to our beleaugured economy.
I will start with some criticism of Klein and her book – her comparison of actual physical torture to the sort of economic 'shock therapy' of Milton Friedman and his extreme free-market disciples is extremely tenuous and brings down the tone of the book to the point that extreme free market supporters are painted as a kind of bogey men. It is outlined later in the book that economic 'shock therapy' can indeed engendar and rely upon violence, as shown by the hideous regime of Pinochet in Chile, so the linking of torture to this economic ideal is not needed, in my opinion. However, Klein's outlining of how a rapid crash course in deregulation, privatisation and savage cuts in public spending can destroy a society has extraordinary resonance with the current decimated state of the Irish economy.
Klein recounts the stories of many countries – particularly in South America – during the 60's and 70's, that were savaged by economic crises such as high unemployment or hyperinflation, many caused by external sources such as interest rate hikes and trade embargoes. This allowed a certain type of dictator to take advantage of these crises and launch successful coup d'etats (supported and abetted by the CIA, determined to rid Latin America of 'Socialism'). These dictators were inspired by the extreme free-market views of the Chicago School of Economics and particularly Milton Friedman's ideas – indeed Friedman acted as an advisor to Pinochet in Chile. Friedman viewed these countries as a kind of experimental lab, where he could test his theories and mathematical models – the resulting breath-taking hike in inequality and decline in standard of living of most workers would imply that this 'shock tactic' theory should have stayed just that – a theory. However, in the 80's various events occurred which proved that the 'shock theory' may take hold in Western democracies, given enough of a crisis – as occurred in Britain after the Falklands war and Thatcher's privatisation spree, and later in the US after 9/11 with Bush's privatisation of the military and even social security.
But war is not the only kind of crisis which can provoke serious national instability – economic crises are just as serious. Whereas after the Great Depression, there was a worldwide consensus that redistributive policies like the New Deal would be the solution, in the last three decades we have seen a swing in the other direction. When Poland finally won independance from the shackles of Moscow, it sold off most of its State assets for lucrative deals with the elites, while the Government cut the wages of the standard worker. Organisations such as the IMF have forced countries to not renague on the free market policies which got them into the crisis in the first place, but to instead plunge further into that model – privatise more, deregulate more, and purgethe public service to its very bones. In Friedman's own words – ''Only a crisis – actual or perceived – produces real change. When that crisis occurs, the actions that we take depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.''
This finally leads me to Ireland's current situation – it seems that we are fucked. As crude as that statement is, it is nowhere near as crude as the Government's handling of the Depression in our country. In 2008, all that time ago, Fianna Fail indeed denied that we were in recession – maybe they knew that because they have been in power for so long that they have noone else to blame (of course after the Wall Street crash we were told it was all Lehman Brothers' fault). Then we were told that there would be a soft-landing. Then we were told that there would have to be a minor adjustment, and were sold the magical solution of the banking guarantee (in fact Sinn Fein, for all their posturing these days comparing Labour to FF and FG, voted in favour of this act of economic stupidity - dare I say treason)
Nearly 15,000,000,000 euro has now been cut from the economy in the last 4 budgets – a huge figure (I won't remind you of Lenihans claim last Christmas that we had 'turned the corner'). Even more savage cuts have become apparantly, in the words of Friedman, 'politically inevitable'. And what has this slashing of public expenditure actually achieved? Absolutely nothing – in fact, it has further deflated our economy. Unemployment has inevitably sky-rocketed from a lack of investment, emigration has surged (unemployment would be half a million people without it) and our bond yields are increasing hour by hour. This is despite last weeks clarification that the adjustment this year will be 6,000,000,000 with the vast majority of that in cuts. As the cliché says, the definition of insanity is doing the same thing over and over, and expecting a different outcome.
Why are our bond yields increasing at such a rate (over 8 points this week, within spitting distance of junk status) ? It is because investors know that a country needs to have a capacity to actually grow and pay back its debt – cutting everything just doesn't work. Obama has been lambasted for investing in a stimulus package in the US, but this has reduced unemployment significantly, as has been the case for other countries in Europe. Why is our Government so afraid of seeing the obvious benefits of stimulus packages and the multiplier affect? I believe it is due to the belief of many individuals in the media, Government, the Department of Finance and Brussels in the 'shock theory' school of economics. They ignore the real causes of this crisis – massive deregulation under Charlie McCreevy, poor governance, low taxes and huge dependance on construction, etc and instead, favour exactly the same medecine. How do we lower the defecit ? Why of course, we have to privatise all productive State companies (recently outlined by Fine Gael in their policy document), we should keep taxes at their unrealistically low level, and we should lay off a sizable portion of the public service.
But why would people like Sir Anthony O' Reilly, Micheal O' Leary or Dennis O' Brien want a more fair distribution of the pain in the Budget? As billionaires with an extensive influence in the media, they are able to manipulate opinion towards this 'shock doctrine' – keep the people divided, keep the private sector pitted against the public sector, students versus the middle class, pensioners versus the rest of society – it is a divide and conquer strategy. In my opinion it is more like a scorched earth policy. And while the vast majority of the media, and indeed society, ignore the real perpetrators of this crisis, these same people are able to espouse their shock and awe tactics to the public that had no hand in the making of it. Make no mistake, the likes of O' Reilly are rubbing their hands in glee at this 'opportunity' to implement their individualistic idealogy on this whole country. We get multi-millionaires like Peter Sutherland (Chairman of the secretive Bilderberg Group and head of RBS when it had to be bailed out by the British Government) saying that the dole should be hit significantly, and Mike Soden (disgraced ex-CEO of Bank of Ireland who was sacked for looking up porn in his office) saying that college fees should be re-introduced. It is time that every Irish person stands up and realise the true intentions of these people, and groups like the IMF. They have a lot of impressive mathematical equations but most of them come down to this:
Divided people = Increased Profit
It turned out better than expected – there was a book reading from a renowned travel writer, as well as some wine-tasting after. How so very French! Determined to keep my promise, I bought a book that had been previously recommended to me by a friend – The Shock Doctrine by Naomi Klein, the author of a previous bestsellet No Logo. I'm sure a lot of you have read The Shock Doctrine, and will have your own opinions on the book (no doubt depending on what political spectrum you hail from) but what I would like to outline is its relevance in Ireland today, and the adherence by some sections of the Irish media and political establishment to implement 'shock therapy' to our beleaugured economy.
I will start with some criticism of Klein and her book – her comparison of actual physical torture to the sort of economic 'shock therapy' of Milton Friedman and his extreme free-market disciples is extremely tenuous and brings down the tone of the book to the point that extreme free market supporters are painted as a kind of bogey men. It is outlined later in the book that economic 'shock therapy' can indeed engendar and rely upon violence, as shown by the hideous regime of Pinochet in Chile, so the linking of torture to this economic ideal is not needed, in my opinion. However, Klein's outlining of how a rapid crash course in deregulation, privatisation and savage cuts in public spending can destroy a society has extraordinary resonance with the current decimated state of the Irish economy.
Klein recounts the stories of many countries – particularly in South America – during the 60's and 70's, that were savaged by economic crises such as high unemployment or hyperinflation, many caused by external sources such as interest rate hikes and trade embargoes. This allowed a certain type of dictator to take advantage of these crises and launch successful coup d'etats (supported and abetted by the CIA, determined to rid Latin America of 'Socialism'). These dictators were inspired by the extreme free-market views of the Chicago School of Economics and particularly Milton Friedman's ideas – indeed Friedman acted as an advisor to Pinochet in Chile. Friedman viewed these countries as a kind of experimental lab, where he could test his theories and mathematical models – the resulting breath-taking hike in inequality and decline in standard of living of most workers would imply that this 'shock tactic' theory should have stayed just that – a theory. However, in the 80's various events occurred which proved that the 'shock theory' may take hold in Western democracies, given enough of a crisis – as occurred in Britain after the Falklands war and Thatcher's privatisation spree, and later in the US after 9/11 with Bush's privatisation of the military and even social security.
But war is not the only kind of crisis which can provoke serious national instability – economic crises are just as serious. Whereas after the Great Depression, there was a worldwide consensus that redistributive policies like the New Deal would be the solution, in the last three decades we have seen a swing in the other direction. When Poland finally won independance from the shackles of Moscow, it sold off most of its State assets for lucrative deals with the elites, while the Government cut the wages of the standard worker. Organisations such as the IMF have forced countries to not renague on the free market policies which got them into the crisis in the first place, but to instead plunge further into that model – privatise more, deregulate more, and purgethe public service to its very bones. In Friedman's own words – ''Only a crisis – actual or perceived – produces real change. When that crisis occurs, the actions that we take depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.''
This finally leads me to Ireland's current situation – it seems that we are fucked. As crude as that statement is, it is nowhere near as crude as the Government's handling of the Depression in our country. In 2008, all that time ago, Fianna Fail indeed denied that we were in recession – maybe they knew that because they have been in power for so long that they have noone else to blame (of course after the Wall Street crash we were told it was all Lehman Brothers' fault). Then we were told that there would be a soft-landing. Then we were told that there would have to be a minor adjustment, and were sold the magical solution of the banking guarantee (in fact Sinn Fein, for all their posturing these days comparing Labour to FF and FG, voted in favour of this act of economic stupidity - dare I say treason)
Nearly 15,000,000,000 euro has now been cut from the economy in the last 4 budgets – a huge figure (I won't remind you of Lenihans claim last Christmas that we had 'turned the corner'). Even more savage cuts have become apparantly, in the words of Friedman, 'politically inevitable'. And what has this slashing of public expenditure actually achieved? Absolutely nothing – in fact, it has further deflated our economy. Unemployment has inevitably sky-rocketed from a lack of investment, emigration has surged (unemployment would be half a million people without it) and our bond yields are increasing hour by hour. This is despite last weeks clarification that the adjustment this year will be 6,000,000,000 with the vast majority of that in cuts. As the cliché says, the definition of insanity is doing the same thing over and over, and expecting a different outcome.
Why are our bond yields increasing at such a rate (over 8 points this week, within spitting distance of junk status) ? It is because investors know that a country needs to have a capacity to actually grow and pay back its debt – cutting everything just doesn't work. Obama has been lambasted for investing in a stimulus package in the US, but this has reduced unemployment significantly, as has been the case for other countries in Europe. Why is our Government so afraid of seeing the obvious benefits of stimulus packages and the multiplier affect? I believe it is due to the belief of many individuals in the media, Government, the Department of Finance and Brussels in the 'shock theory' school of economics. They ignore the real causes of this crisis – massive deregulation under Charlie McCreevy, poor governance, low taxes and huge dependance on construction, etc and instead, favour exactly the same medecine. How do we lower the defecit ? Why of course, we have to privatise all productive State companies (recently outlined by Fine Gael in their policy document), we should keep taxes at their unrealistically low level, and we should lay off a sizable portion of the public service.
But why would people like Sir Anthony O' Reilly, Micheal O' Leary or Dennis O' Brien want a more fair distribution of the pain in the Budget? As billionaires with an extensive influence in the media, they are able to manipulate opinion towards this 'shock doctrine' – keep the people divided, keep the private sector pitted against the public sector, students versus the middle class, pensioners versus the rest of society – it is a divide and conquer strategy. In my opinion it is more like a scorched earth policy. And while the vast majority of the media, and indeed society, ignore the real perpetrators of this crisis, these same people are able to espouse their shock and awe tactics to the public that had no hand in the making of it. Make no mistake, the likes of O' Reilly are rubbing their hands in glee at this 'opportunity' to implement their individualistic idealogy on this whole country. We get multi-millionaires like Peter Sutherland (Chairman of the secretive Bilderberg Group and head of RBS when it had to be bailed out by the British Government) saying that the dole should be hit significantly, and Mike Soden (disgraced ex-CEO of Bank of Ireland who was sacked for looking up porn in his office) saying that college fees should be re-introduced. It is time that every Irish person stands up and realise the true intentions of these people, and groups like the IMF. They have a lot of impressive mathematical equations but most of them come down to this:
Divided people = Increased Profit
Tuesday, November 2, 2010
This article is going to appear in the next edition of the UCC Express, so apologies if it appears rather newspaper-orientated! Have to keep it clean for the aul parents ya see...Hope you enjoy!
I have to apologise for the lack of an article in the last edition – as much as I wish it was due to being too busy sight-seeing/drunk/beating off women with a stick, it was actually down to a plain old-fashioned technological mishap. Nevertheless, a lot has changed since I last wrote – I finally have my own apartment! Sure, it's just a single room and involves climbing up 7 flights of stairs, but when you're faced with the prospect of homelessness (or just really shitty hostels), then any run-of-the mill studio will seem like a sparkling penthouse. One of the reasons it has taken me so long to find an apartment is the sheer amount of beourocracy you have to get through to do anything in Paris – you have to go into a bank with a mountain of documents and identification in order to get anywhere. However, I have to say I will miss staying in hostels as I had possibly the most fun of my time in Paris in one or two of them (including my first taste of absinthe in my life – never again), and the memories will last a lifetime! Of the ones I remember of course...
In moving from hostel to hostel, and finally to my own apartment, I've had to use public transport quite a lot. I have to say that the public transport in Paris has been like a breath of fresh air from the likes of Bus Eireann, where the buses are rarely pleasant and even more rarely on time. Say what you will about the French, but they certainly do know how to pull off a good public transport system e.g. Rennes in Brittany is smaller than Cork, and yet manages to have one metro line – one more than our capital city! And if you miss one metro, it's not a disaster as the next one is only 2 or 3 minutes away. The only thing lacking with the transport system in Paris is how unfriendly it is to cyclists – I have only cycled through the city once, and that was enough to scare me off it!
Nevertheless, due to the sheer size of the population, the vast majority of Parisians take the Metro to get to school, college or work. In this way, it is a fascinating microcosm of French society at large – you get the businessmen with Blackberries seemingly glued to their hands, the hipsters who are each trying to outdo each other in the fashion stakes, the seemingly never-ending amount of gypsies asking for spare change, and even violin players who have perfected the art of busking at 70 mph. Therefore the Metro is not just a handy way of getting around, its a bona-fide sociological experiment.
A far more negative aspect of Parisian life was made apparant to me when I was window-shopping for clothes in the Opera district (as an impoverished student, its all I can do really). I was walking past the luxurious and world-renowned Galerie Lafayette (actual biggest lingerie section in the world... or so I hear) and I saw a sight that stopped me dead in my tracks - there was a beggar with no arms, not even with two stumps he could use. A factor that added to the surrealness of the situation was that no Parisians even noticed him, they just breezed past, loaded with shopping bags and with no worries in the world. It really brought home how lucky I was here, in this City of Light and Love for 9 months as a student with good prospects for the future (hopefully – fecking recession) while this man had nothing, not even the use of a single hand. It was a real contrast which showed the good, the bad and the ugly side of this beautiful city.
Indeed, while the whole idyllic image of Paris is very much apparent in the city, if one moves into the banlieues, the scene changes completely. There are slums in the suburbs of Paris that resemble something from American TV shows such as The Wire – largely populated with North African immigrants, where a high percentage of the kids have never known their father. The youth unemployment rate in these places sometimes surpasses 50% (France has the highest unemployment rate amongst young people in Europe of 25%) - these are the kind of conditions which provoked the riots of 2005 that spread throughout France. My problem with the Right in France is that they favour locking up, or even deporting, these unsettled citizens while not addressing the root cause of why these people turned to crime in the first place. And while the beourgeiosies shop in the boutiques of the Champs Elysees, it appears that under Sarcozy's reign, liberté, egalité et fraternité applies to some more so than others.
I have to apologise for the lack of an article in the last edition – as much as I wish it was due to being too busy sight-seeing/drunk/beating off women with a stick, it was actually down to a plain old-fashioned technological mishap. Nevertheless, a lot has changed since I last wrote – I finally have my own apartment! Sure, it's just a single room and involves climbing up 7 flights of stairs, but when you're faced with the prospect of homelessness (or just really shitty hostels), then any run-of-the mill studio will seem like a sparkling penthouse. One of the reasons it has taken me so long to find an apartment is the sheer amount of beourocracy you have to get through to do anything in Paris – you have to go into a bank with a mountain of documents and identification in order to get anywhere. However, I have to say I will miss staying in hostels as I had possibly the most fun of my time in Paris in one or two of them (including my first taste of absinthe in my life – never again), and the memories will last a lifetime! Of the ones I remember of course...
In moving from hostel to hostel, and finally to my own apartment, I've had to use public transport quite a lot. I have to say that the public transport in Paris has been like a breath of fresh air from the likes of Bus Eireann, where the buses are rarely pleasant and even more rarely on time. Say what you will about the French, but they certainly do know how to pull off a good public transport system e.g. Rennes in Brittany is smaller than Cork, and yet manages to have one metro line – one more than our capital city! And if you miss one metro, it's not a disaster as the next one is only 2 or 3 minutes away. The only thing lacking with the transport system in Paris is how unfriendly it is to cyclists – I have only cycled through the city once, and that was enough to scare me off it!
Nevertheless, due to the sheer size of the population, the vast majority of Parisians take the Metro to get to school, college or work. In this way, it is a fascinating microcosm of French society at large – you get the businessmen with Blackberries seemingly glued to their hands, the hipsters who are each trying to outdo each other in the fashion stakes, the seemingly never-ending amount of gypsies asking for spare change, and even violin players who have perfected the art of busking at 70 mph. Therefore the Metro is not just a handy way of getting around, its a bona-fide sociological experiment.
A far more negative aspect of Parisian life was made apparant to me when I was window-shopping for clothes in the Opera district (as an impoverished student, its all I can do really). I was walking past the luxurious and world-renowned Galerie Lafayette (actual biggest lingerie section in the world... or so I hear) and I saw a sight that stopped me dead in my tracks - there was a beggar with no arms, not even with two stumps he could use. A factor that added to the surrealness of the situation was that no Parisians even noticed him, they just breezed past, loaded with shopping bags and with no worries in the world. It really brought home how lucky I was here, in this City of Light and Love for 9 months as a student with good prospects for the future (hopefully – fecking recession) while this man had nothing, not even the use of a single hand. It was a real contrast which showed the good, the bad and the ugly side of this beautiful city.
Indeed, while the whole idyllic image of Paris is very much apparent in the city, if one moves into the banlieues, the scene changes completely. There are slums in the suburbs of Paris that resemble something from American TV shows such as The Wire – largely populated with North African immigrants, where a high percentage of the kids have never known their father. The youth unemployment rate in these places sometimes surpasses 50% (France has the highest unemployment rate amongst young people in Europe of 25%) - these are the kind of conditions which provoked the riots of 2005 that spread throughout France. My problem with the Right in France is that they favour locking up, or even deporting, these unsettled citizens while not addressing the root cause of why these people turned to crime in the first place. And while the beourgeiosies shop in the boutiques of the Champs Elysees, it appears that under Sarcozy's reign, liberté, egalité et fraternité applies to some more so than others.
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