Evening Blog - 05 December 2010

Criticism, analysis, response: The BudgetJam live blog. Email your comments here or comment below.

20.30 Thanks Michael for the X Factor shift. Gavan here to pull the shutters down on Budgetjam for another bracing day of commentators clinging grimly to orthodoxies that no longer exist (think of it as an extended version of that moment when Wiley Coyote realises he is suspended in mid-air...)

Top story on The Irish Times as we potter off to fitful sleep is comments by Mohamed A El-Erian, 'chief executive of investment management firm Pacific Investment Management Company (Pimco)', the world's largest bond trading firm, that the euro is doomed and that contagion will not even have the edge taken off it by 'current reactive strategies'. I think we all know by now that such speculative comments are not simply idle musings, but more to the point, do the many politicians and commentariat who bloated public discourse today with rueful or confident versions of 'we are where we are' even pay attention anymore? What happened their real world fetish?

And then there was Nick Cohen in The Observer today. Now fans of Nick will know that he really doesn't mind spurious interventions in countries as long as there is high-minded rhetoric available to theme tune it, but hard to disagree with this rejoinder to Madam's risible rhetorical:

"To the question: "Was it for this?" the Irish must now add: "Who do you think you are?" The terms Ireland's new rulers in the EU have imposed on their subjects are inexcusable. It is hard to tell which is worse: the stringency of the EU's demands or the immorality that lies behind its choice of targets. The debts of Ireland's private banks are now the Irish public's burden. Rather than force senior bond holders in German, French and British banks to accept the consequences of their reckless lending, taxpayers will take the loss and bail them out. Under the terms of the EU's "rescue package", public debt will reach 130% of GDP and Ireland will repay interest at 5.85%. After a couple of years, they must start repaying the principal."

Till tomorrow then. A round-up of protest actions, new articles and intensified blogging here from 9, Irish time.

18.40 The news in today's Sunday Tribune that Coillte might be privatised and bought up by International Forestry Fund, headed by Bertie Ahern is a pithy illustration of McCarthyism Irish-style. Colm McCarthy suggested in 2009 that the State could get 'once-off receipts for the exchequer' through a 'review of the operations of Coillte with a view to realising optimal return through rationalisation, asset disposal and, possibly, privatisation.' Selling off State assets is part of the watching brief of Colm McCarthy and funding the IMF deal provides an excellent rationale for full-blown McCarthyism, namely, the wholesale privatisation of public goods. In the Irish version of Shock and Awe, the first wave of public dispossession comes through the decimation of public services and the unapologetic assault on the poor and the second is the confiscation of public assets to pay debts contracted by private bodies. Expect the the Third Wave in the Form of Committees of UnIrish Activities set up to discipline those who question the cherished doctrines of the Free Marketeers.

17.38 Nothing like distance for clarification but distance also means being conveniently distanced from responsibility. The Head of Paris Rate Research in Société Générale Ciaran O'Hagan tells readers of the Sunday Business Post' Money and Markets Section that what Ireland needs is not less but more austerity. O'Hagan, from the Bank's bond desk, a desk that along with many others has a vested interest in Ireland's difficulties, presents himself as a neutral observer. In the typically modest way of banker pundits we are told that Ireland's problem is the West's, 'O'Hagan said governments in the US and Europe were hamstrung by vain and increasingly desperate attempts to maintain living standards'. 'Hysterity' is the latest MBA coinage for 'citizens of the richest economies of the world' failing to tighten their belts. Hysterity might be a better description of the failure to realise that the greatest threat to living standards and social wellbeing is the rampant inequality which feeds off and is intrinsic to the kinds of bond operations promoted by Société Générale and other financial institutions. Democracy in the O'Hagan worldview is always an impediment ('hamstrung') and shows just as in There is No Alternative mantra that the true enemy of the Market is not Government but Democracy itself. 


17.00 The pundits, practitioners and propagandists who argued for a decade that only total faith in the markets would allow Ireland to grow and develop have now decided that the only people qualified to get us out of the mess created by these policies are the people who advocated them in the first place. If at first you don't succeed, then try failing and failing again but preferably at someone else's expense. In order for the sleight of hand to work of course blame must be projected elsewhere and the public sector, the 'cosseted civil servants' Shane Ross and Nick Webb speak of in the Business Section of today's Sunday Independent, are the by now predictable scapegoats in the Orwellian restructuring of reality. What is ignored is that the grossly inflated salaries of senior public servants in education, health and elsewhere were the result of a private not a public sector logic being applied to the public service. The argument went that in a competitive marketplace if Vice-Presidents of universities, Secretaries of Government Departments and other senior officials were not to be paid off the scale salaries they would exit en masse to the private sector. Those union officials who resisted such moves were told that they were 'out of touch' with the contemporary marketplace and competitive practices. So the private sector rationale which was used to justify grossly inflated salaries for the few is now is now disavowed and the whole development is presented as a corrupt organic outgrowth of public service culture than merely another expression of market idolatry and its baleful consequences.