Our economy is crippled – but there’s no shortage of support for finance capital.

This week An Taoiseach, Brian Cowen, is in the United States to visit Wall Street and it’s leaders – he must think economic salvation lies with American investors … so they need to be looked after.  He promised them €250 million over the next 3 years if they will match that figure and locate enterprise here, this is part of our new “innovation hub” strategy.

 

A policy of foreign dependence

Cowen’s US trip is backed-up by heavy advertising from the IDA, encouraging foreign investors to come here to make money – and give us jobs – at leist this is how government speakers present it.  This type of initiative is typical of the strategy for development of our economy followed by all of the cartel parties (FF, FG, Labour and Greens) over the last few decades.  The policy is to go ‘cap in hand’ to America or the EU with their begging bowl, believing that to pay these rich corporations is the only way that we can have a productive economy.

Despite the history of how foreign corporations have performed here, most hack economists still think this strategy of reliance on foreign investment pays … maybe we are supposed to think of these foreign corporations as our benefactors – are they really interested in creating employment in good ol’ Ireland?

The cold truth

In reality, no private corporations invest anywhere unless they make a profit; if they could do so with no or minimal staff then they would – these are the demands of capitalism.  To imply that foreign investors are interested in job creation is simply untrue, and maybe it is a lie, to hide the real motivation behind this economic policy.  When money like this is passed over the table something usually falls off … into the rights hands, of course, there is a list of advisors, facilitators, auditors, solicitors etc. waiting in line.

A significant portion of our exports (and employment) comes from foreign companies; however, these exports return minimal tax to our social economy.  Further, such companies receive huge subsidy in their establishment and employment; often with hundreds of staff being financed through Fás or other schemes.  However, maybe the real jewel in the crown of Ireland for our friendly foreign corporations lies in the area of concessionaire accounting; moving profits made from business in other countries back to Ireland; so that there is less tax paid.  There are a myriad of legal schemes all designed to allow large corporations and finance houses make profits by simply locating a small office here and employing the right ‘consultants’.

The gravy runs thick – those ‘in the know’ capitalise and feed off this system.

Slim benefits from foreign corporations

While we may have gained something in the short term from such foreign companies, through employment and demand for backup services in local areas etc., in the long term it has created a dependence that works against the majority of our people and against domestic enterprise.  Reliance on foreign corporations has resulted in the almost complete destruction of our domestic manufacturing and has exposed us to the “race to the bottom”, where Irish working people now complete with workers in lower cost economies.  Irish business must now compete with enterprises in economies abroad which have a much lower cost base – and there is always someone with a lower cost base – the world economy develops unevenly.  Globalisation in industry has resulted in making it almost impossible to establish anything other than very specialised manufacturing in countries like Ireland.  Large corporations pick a combination of the cheapest source of labour and the level of subsidy on offer when they are locating their facilities.  There can never be security or stability in our economy where enterprises can move around the globe in pursuit of profit for private shareholders – regardless of the interests of the ones who actually do the production or the needs of the community in which they were established.

Reality check on our status

According to the CSO, nearly 6,000 more people are signing on every month, at the moment nearly 450,000 human beings are on the live register – despite emigration.  We are told to expect this level to remain over the next two years, even though emigration is to continue.  Minister Batt O’Keeffe advises that people should attend re-training – which the government is to make available.  Maybe the Minister really wants our youth to emigrate? this week he highlighted the construction jobs available in the UK (Olympics) such that Irish people might benefit from this!  Unemployment is one of the worse aspects of this crisis – the society is pushing aside a whole section of our population – they are not required, in fact they are a burden!  This alone must surely tell us something is fundamentally wrong with the way our society is organised.

If that wasn’t enough …

Over 330 homes were re-possessed in 2009 – this excludes families who made ‘quiet’ arrangements on a re-possession/rent-back basis – today more than 70,000 people are in trouble with mortgages – the figures published on the question vary considerably.  This year, a voluntary code of practice has been recommended to the lending institutions – that they hold off on legal action for 12 months to give people a chance.  Such measures offer nothing of consequence to troubled mortgage holders, it just delays the day of execution, and of course – in the meantime, the banks continue to receive subsidy from our public funds.

Domestic Irish business under pressure.

In 2009 more than 1,100 Irish companies closed down; in the first half of 2010 the number is already nearly 800, up 27% on 2009.  Despite the billions taken from our social economy to rescue the private bond holders of the various banks cash has still not been released to support domestic business and the employment it sustains.  Even this week’s scheme requesting AIB and Bank of Ireland to lend €12 billion to small/medium businesses over the next two years seems set to fall of deaf ears.  Our system is such that the banks can make more profit by NOT lending to their traditional customer – citizens and domestic business – all in the interest of service to foreign financiers.  This type of activity produces nothing in our economy but actually blocks whatever initiative that may arise here by starving it of credit.

We’ve all done very well, thanks!

To cap it all, yesterday the IMF congratulated our government on their performance, despite our deficit being the highest percentage in Europe, and advised that we needed to keep our austerity (cutbacks) programme going.  Irish banks apparently owe Germans financiers over €127 billion – they want it back.  The cost of saving Anglo-Irish Bank alone is expected to reach €50 billion, total for all bank bailouts (and NAMA) is nearly €100 billion, but, so long as we keep paying … international speculators will have ‘confidence’ in us, this is supposed to be a good thing.

They are even urging NAMA to start selling off it’s property as soon as possible, so that the property market can begin to recover itself – for what? More of the same?!  One can imagine the wolves gathering to pick the bones of NAMA, which of course is all paid for by our social economy.

Of course the IMF are happy – why wouldn’t they be?  We continue to re-pay ‘our’ loans at even higher interest rates than existed before this crisis.  We are accepting all the cutbacks in our social services, welfair, health and education.  We have rescued (for now) the banks, we have bailed out capitalism from collapse, we are maintaining ‘confidence’ – we have been good servants, they like us, so they will keep coming back for more.

A new beginning is needed

thefuture Initiative, encourages everyone to think about what kind of economy this country needs, by what rules should it be arranged, in whose interest etc.  We need to plan the Irish economy to serve the interests of Irish people.  Such a plan should demand the participation of everyone, it should utilise Ireland’s natural resources in a sustainable way, it should remove uncertainty for citizens, it should protect us from the anarchy of the so called ‘free’ market – which is anything but ‘free’, it is controlled by monopolies. Of course, readers probably understand this already, we know that people aren’t fools, so the necessity of today is to find the solution – this is the task to which we are determined to make our contribution.

Hang it all, let’s buy some military hardware!

This is the bit about war, here it is: despite our own near bankruptcy we recently contributed €1.3 billion to rescue the Greek economy.  Now the news breaks that Greece is spending €2 billion purchasing two submarines from Germany and have recently spent €1.5 billion purchasing F16 fighter jets from the US as well as other expenditure for military purchases from France.  Why? Why? Why?

 

Sort by:   newest | oldest | most voted
corneilius
Guest
Good Article. Accurate. Pointed. As to the Why? Why? Why? it’s obvious – those who rule, do so for their own perceived benefit, and for no other reason. And it is inn their interests to condition those they rule to accept it, even if they have to live in a near constant state of denial. Which is a waste of a good life. Even if it has it’s comforts. I left Ireland in 1979, looking for work, so I am not so well qualified to comment on current affairs in Ireland. However it did strike me at one time that… Read more »
wpDiscuz