Monday gave us the spectacle of our esteemed leaders lining up in the manner of some great occasion of state – bringing out all the heads – to tell us some important news. One would be forgiven for thinking that the revised National Development Plan (NDP) capital expenditure budget was a great achievement.
More bang for our buck …
The trio (Lenihan, Cowen & Gormley in photo) outlined the plan for capital expenditure of €39 billion up to 2016 and promised 270,000 jobs over the same period. Even though this is nearly a 50% cut on the original budget of €75 billion we can be sure it is ok because we will get “more bang for our buck”. The crisis must be over, let us rejoice and start spending all the cash! Now the lads go off on holiday, the economy is sorted!
Let the wise man speak.
If we thought that this news was simply too good to believe, RTÉ later interviewed one Dan McLaughlin, Group Chief Economist at the Bank of Ireland, to assure us it was right. Mr. McLaughlin said (without flinching) that this plan would inject money into the economy and it would act as a badly needed stimulus, even though, instead of €8 billion p.a. it is only going to be €5.5 billion. Still an’ all, he has confidence, and the Bank of Ireland’s chief economist, right from before the start of this crisis should know what he is talking about. So we too can have great confidence – let’s have no one ‘talking down’ our recovery! This economist is one sure friend of the people, let there be no mistake – he probably only works at the bank because he can help the country best that way.
The reduced level of capital spending means that some projects are to be cut, they include the western rail project and the schools building programme (reduced by more than half); however the DART interconnector Metro North and the DIT relocation are going ahead. One can’t help but see a Dublin centred bias in these decisions and a government interested in prestige projects – over what are probably more deserving and needed ones.
Four points are worth noting in this situation:
- Firstly, the cuts in capital spending are only needed because of our rescue for the likes of Mr. McLaughlin’s Bank of Ireland and to pay off their masters in Germany and world finance centres.
- Secondly, the capital spending on these projects will probably inject funds into the same large construction firms that we are rescuing via NAMA – maybe incorporated under different names.
- Thirdly, the Construction Industry Federation (CIF) have been quick to point out that infrastructural development (i.e. investment in their companies) will benefit employment, how big hearted of them to be so concerned! They forgot to highlight the first requirement of this “investment”, that is to make a PROFIT for their private shareholders. They don’t really care if there are jobs involved, in fact, if they could generate their profit without any jobs, or by giving the lowest possible wages they would prefer it.
- Fourthly, part of the revised NDP is to take some of the “ghost estates” into use for public housing, good as this may be it is more music to the ears of our construction barons.
The CIF is urging that the new capital projects be started quickly … of course they are.
So why the big line-up of senior government ministers, in shiny suites? Usually when this happens we can expect that they are about to spin another lie. The more dressing the better, these servants of finance capital are masters of spin; this is part of how they maintain control over the very ones whose work pays for everything – ordinary people paying their direct and indirect taxes, people forgoing health care, dropping their living standards etc. They want us to think they are working in our interests, however, where is the plan to develop productive resources in Ireland? They are hiding the lack of any plan to build a real economy based on satisfying the needs of Irish people and utilizing our own resources to the full – we deserve better than to exist off the left overs of some domestic construction barons, developers or some money grasping bankers, foreign or home-grown.
An unholy cartel of vested interests
‘Opposition’ from Labour and Fine Gael have acted their usual role objecting to the measures announced. Their main differences are that the “balance is wrong” and the “timing is too late”; oh what a pity! if only the ‘balance’ and/or ‘timing’ was right … However, they offer no fundamental difference in policy; they are an essential part in the drama – an unholy cartel furthering their own interests by looking after big business and ensuring that the current system, which feeds them, continues.
Lets pay the finance monopolies even more …
This week the Moody rating agency again downgraded Irelands credit rating status, they think that ‘Ireland Inc.’ isn’t a very good place to lend money to. So – the already extortionist interest we are paying will get even higher. Couple that with the news from some of the biggest European banks where share prices and profits are up at quarter end to June – for UBS of Switzerland and Deutsche Bank of Germany. For USB shares are up 11% and profits are $1.9 billion in the quarter, for Deutsche Bank shares are up 4%, profits are €1.16 billion in the quarter.
To crown this off, interest rates for domestic mortgage holders (80,000 at PTSB alone) are increasing all the time, now at nearly 4.2%, even though the ECB rate remains at 1%. ‘Our own’ banks are skimming off as much as possible from people who are already hard pressed and pushed to the limits.
There is a strong case to say that this economic crisis is actually good for the larger monopoly finance organisations. The big monopoly banks can buy out the ‘small fish’ at lower prices, or let them die and take their market share. On top of that, they can lend funds at higher rates to everyone, especially smaller states like Ireland whose economy has been geared towards their system of credit and dependence on foreign direct investment.
A new dawn is needed
thefuture Initiative would like to be in contact with anyone concerned with the current bankrupt state of politics/economics in Ireland, regardless of any party political or other affiliations, together we can provide answers.