Monthly Archives For December 2012

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Films of the Year 2012

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It is a moot point to say if any year is a good or bad one in cinema, especially if one watches films on theatrical release, as I do, even more so if one is considering films from all corners of the Earth, and only a tiny sampling at that. That said, there were long stretches this year when I wondered whether I was going to see anything of note again; the better releases mostly seemed to come in clumps in the spring and the autumn, with long stretches of unremarkable fare in between. In the end, though, it was a decent enough year, with more than a few films that will be remembered in years to come as classics.

On the awards front, 2012 was a year when nobody was happy with anything. The Artist was a surprise Academy Award winner (or maybe not such a surprise) with many in the US complaining that the Academy was becoming increasingly detached from the concerns of ordinary filmgoers (that a film as ultimately unchallenging as The Artist might be considered an avatar of elitism just shows how alternative a universe the Oscars actually do inhabit). At Berlin, though the Taviani brothers’ Caesar Must Die was in many respects an admirable film, few people expected Miguel Gomes’s Tabu to be overlooked for the Golden Bear in its favour. Michael Haneke picked up a second Palme d’Or at Cannes for Amour, and there was much grumbling about the overweening deference to realist dramas shown by Nanni Moretti’s jury; in truth those films that were rewarded were, by and large, quite good but, like many others, I think it might have been a shot in the arm for unconventional cinema to have given the top prize to Leos Carax’s wonderfully barmy Holy Motors. The Mostra’s arcane rules prevented Paul Thomas Anderson’s The Master from winning the Golden Lion at Venice, Kim Ki-duk’s Pieta being a surprise winner instead. All of these controversies are piddling in the wider scheme of things but it was curious how resistant to (qualified) popular opinion the voters were throughout the year.

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On the Need to Wield the Political Crowbar

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I heard a Fianna Fail TD saying on the radio that the decision to tie the household charge and the property tax to the funding of local councils was an attack on local democracy. As central funding through general taxation has been removed a failure to collect adequate amounts of the property tax means that funding of local services will be smaller.

Allowing local authorities to increase that charge puts the negative political feedback, particularly in areas where compliance is less, like Donegal, on to the local councils and protects the central government. It was an odd sensation, shouting at the radio (not unusual) in agreement with someone in Fianna Fail (which very much is).

However, I would add that with a smaller budget because of the problems of collecting the Household Charge and the property tax – and the structure of the property tax is almost exactly the same as the household charge and its associated problems, with good reason – means that it would require additional cuts to services.

This will follow the now established pattern of replacing publicly funded publicly owned services with private operations. Again, as has been well established, the private operation will be less efficient, more costly to the public purse in the medium term and the tendering process will be corrupt or suspect, with small operators losing out to larger conglomerates leading to a monopoly situation for the provision of these services after an initial flurry of 'competition'. It’s also been well established that Public Private Projects have been seen for over a decade as a growth opportunity for financial institutions in the IFSC, and the present government has recently provided them with a very specific kitty just for this.

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Wideawake Philosophy

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Book Review: After Finitude, Quentin Meillassoux (Continuum, 2008) & Quentin Meillassoux, Graham Harman (Edinburgh University Press, 2011)

In a letter to Harriet Shaw Weaver in 1926, when he was working on what would become Finnegans Wake, James  Joyce points towards what he is now trying to do in his writing by saying that some things cannot be expressed in ‘wideawake language cutanddry grammar and goahead plot’. Quentin Meillassoux’s style of writing, when it comes to philosophical argument at least, is decidedly pre-Wake for his book After Finitude is characterized by a lucidity and correctness that Joyce was quite capable of but nonetheless had put behind him. Meillassoux writes in a way that is not typical of Continental philosophy and what sets him apart from many of his peers perhaps helps explain why he has gained such praise for his work; for some he has already earned a place in the hallowed pantheon of ground-breaking French philosophers. A remarkable achievement for someone whose reputation is largely based on just one book, although dedicated followers of French philosophical fashion can train their truffle hounds to dig up a scattering of essays, excerpts of an unpublished text, The Divine Inexistence, and a second book, The Number and the Siren, about Mallarmé's poem Un Coup de Dés. Is the Meillassoux phenomenon just another cliquish storm in a Parisian teacup or has something explosively new appeared?

The manifest of works of continental philosophy usually indicates intellectual freight of a heavy and bulky kind and one that sometimes requires cognitive apparatus, like set theory in the case of Badiou’s Being and Event. So it comes as welcome relief to know that After Finitude, a mere 128 pages long,  is one of the more reader-friendly texts of recent French philosophy and that its basic argument is put forth with crystal clarity. The book’s author is not one to wallow in words and there is an intellectual impishness to the writing that adds to its attractiveness.

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A Musical Celebration of Subversion

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In 2009 the British National Party took to promoting English folk music on its website. One particularly favoured song was Steve Knightley’s Roots:

When the Indians, Asians, Afro-Celts
It's in their blood, below their belt
They're playing and dancing all night long
So what have they got right that we've got wrong?
Seed, bud, flower, fruit
They're never gonna grow without their roots
Branch, stem, shoot
They need roots…

Although Knightley was dismayed by this “betrayal” and “violation” of his “invention”, he should have realised that such imagery is in perfect harmony with the discourse of fascism. In 1934 the Nazi musicologist Fritz Stein maintained that “as long as it remained undiluted and true to its German roots, folk music was an essential means of gaining respect abroad.” Furthermore, the juxtaposition of “they” and “we” in Knightley’s verse, although purportedly privileging the “Indians, Asians, Afro-Celts [sic]”, is in fact a careless gesture of exclusion.

One consequence of the BNP’s opportunistic advocacy of English folk music was the foundation of Folk Against Fascism (FAF). Describing itself as “neither left-of-centre nor right-of-centre”, this organisation (which appears to be moribund at present) claimed to be “simply a coalition of people who care passionately about British folk culture and don’t want to see it turned into something it’s not: a marketing tool for extremist politics.”

Both of these well-meaning responses leave something to be desired, and that something has now been provided by the Anti-Capitalist Roadshow , “a collective of singers and songwriters: Frankie Armstrong, Roy Bailey, Robb Johnson, Reem Kelani, Sandra Kerr, Grace Petrie, Leon Rosselson, Janet Russell, Peggy Seeger, Jim Woodland plus one socialist magician, Ian Saville.” With no feeble nod to being “neither right nor left”, this collective claims to be “part of the resistance to a capitalism that functions only on behalf of the wealthy, that aims to shrink the public sphere and privatise public services,… and that is destructive to the planet.”

Many of the 30 tracks of the collective’s new double album, Celebrating Subversion, deal forcefully with such specifically British issues as Thatcherism, Tory Chancellor of the Exchequer George Osborne’s views on “the benefits lifestyle”, the dismantling of the National Health Service, the occupation of St Paul’s, the sinking of the Titanic (as metaphor for “the practical outcomes of capitalism”), looting during the 2011 London riots, British arms exports, the Peterloo Massacre, and the suffragette Emily Davison, martyred just a century ago.

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The Case for Penal Levels of Taxation

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Budget 2013 drew few surprises. Income tax, including the top rate on high earners, was, as expected, not touched. Somewhat surprisingly for a coalition including Labour, the budget was deemed less progressive than previous budgets.1 With Sinn Féin and the ULA both proposing to increase the top rate of tax (as well as a wealth tax), the debate on how high or low taxes should be is sure to remain around for some time. I propose that not only are high top tax rates justified in general, but actual penal levels of taxation on high earners are too.

Economically, advocates of not increasing the already ‘penal’ rates on high earners any further argue that it would be a disincentive to work and would have adverse economic effects more generally. To be more precise, they argue these high earners or ‘wealth/job creators’ will stop conjuring employment and riches for the masses and pack up and leave for greener pastures. Of course, there’s plenty to say about this. Is it really believable that people would pack-up and leave for a different country – including taking their children out of school – because their tax liabilities have been increased by a few points.

Economic arguments aside, what rate of taxation is fair?

As many readers are no doubt aware, Paul Krugman pointed out in the Irish Times a few weeks ago that during 1950s, the so-called Golden Age of Capitalism, the top tax rate in America was over 90%.2 Is this fair? I suspect many people would say this is indeed penal and point out that business leaders and CEOs excel at what they do, innovate, invest, help create jobs and wealth, and so on. Progressives and leftists who support higher taxation tend to struggle when this argument is put to them because, essentially, the argument has a lot of merit.

Meritocracy?

A person earning €100,000 is likely to be more competent than one earning €30,000 in the same field – or at least better at applying his or her skills to profit-making. As well as perhaps being more competent, the former is likely to be more innovative because he or she is likely to be higher up the hierarchy and, as such, has more decision-making power. Because he or she will have been promoted to get the top, the meritocracy argument carries some weight, though with qualifications.

For one, innate ability and hard work, though important, are not the only determinants of success. A wealthy person is likely to have been born into wealth. As such, he or she will have been given more opportunities and encouragement. A poor person will likely have had fewer education opportunities, and whose way of life – how he or she dresses, speaks etc. – is denigrated by society. If born into poverty, even the very capable (whatever that means) are unlikely to have the confidence and social skills to excel.

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PPP Wealth Machine: UK and Global trends in trading project ownership

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A UK PPP Equity Database and a full report on Public Private Partnership is now launched. 

High profits and annual returns

The average annual return on the sale of equity in UK PPP project companies was 29% between 1998-2012 – twice the 12%-15% rate of return in PPP business cases at financial close of projects.

Twelve PPP projects had an annual rate of return of over 100% and another 25 had an annual rate of return of between 50%-100%. PPP profits remain unregulated with no profit sharing with the public sector. The excess profit could be £2.65bn, all of which benefits private sector companies.

Unprecedented scale

Equity in 716 PFI/PPP projects (includes multiple transactions in some projects) has been sold in 281 UK transactions worth £5.6bn since 1998. Health and Education PPP projects account for over 60% PPP equity sales between 1998-2012.

Why ownership and control matter

The sale of PPP equity provides new opportunities for profiteering, can invalidate value for money, increases offshore tax avoidance, erodes democratic accountability, increases secrecy and trading of publicly financed assets with significant negative consequences for the future of public services and the welfare state.

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Is Enda Proud of Our Tax Avoidance Services?

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 “I am very proud of the structure that we set up. We did it based on the incentives that the governments offered us to operate,” said Eric Schmidt, Google’s Chairman in an interview in New York.
The Silicon Valley boss went on to suggest that Google would not turn down the opportunity to draw on the big savings allowed under the law in the countries it operates in: “It’s called capitalism. We are proudly capitalistic. I’m not confused about this.”
I wonder if Enda Kenny would state that he is also proud of the incentives his governmnet offers Google to avoid almost all of its Irish corporation tax obligations based on the profits that Google earns per year. Because through Irish law we allow Google to claim that Google Ireland Holdings is not actually Irish but is rather a Bermudian company even though it's registered and uses secretary services of Matsack Trust Limited, 70 Sir John Rogerson's Quay, Dublin 2. From the US tax point of view Google Ireland Holdings doesn't exist, even though it owns Google Ireland Limited which it does recognize. Google Ireland Limited is where, we are told, all the sales from Google Europe (also owned by Google Ireland Holdings, which is turn is owned by Google Bermuda) and wider afield are booked. This could be changed in the morning by simply requiring that a company has to be legally domiciled where its operations are. Even the Irish accountancy and legal firms offering tax avoidance advice to multinationals like Google are saying that this probably is going to have to happen at some point, even though they say that the offical tax rate should come down to 2 or 3% (currently Google only pays 0.14 according to a report in the Sunday Independent and employs )0.06% of the workforce.

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Protest at Cuts to Respite for Carers

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Here's the latest video of Carers Association protest calling for a reversal of the respite care cuts that were announced in Budget 2013.
This is the second protest organised by the Carers Association since the cuts were proposed. The Social Welfare Bill is being debated in the Dáil today with the vote on Thursday, the 13th of November.
Watch and share the video of carers in their own words who protested.
Like Trade Union TV on Facebook.

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The December Issue of Socialist Voice is Out Now

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The December issue of Socialist Voice is now available.

You can view it on-line

A vicious anti-people budget

After much hype and kite-flying, and rumours of the Labour Party playing “hard ball” and being the defenders of the interests of ordinary people, we see that it was all just hot air and spin. They are as committed as Fine Gael are (and Fianna Fáil were) to making working people pay for their crisis. The budget is designed to take a further €3½ billion out of the economy through increased taxes and charges, and cuts in public spending…………..

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07-12-2012 12-27-00

In Search of Labour’s Half Billion

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In defending Budget 2013 Labour has argued that it contained €500 million in a ‘wealth tax package’ or revenue from taxation on high income groups. This, goes the argument, is evidence of Labour’s influence on the budget – revenue that would be missing were Labour not in Government.  So what are the measures that add up to €500 million?  And is this sum robust?

First, we have a problem with labelling.  While some Labour TDs have called this a ‘wealth’ package, the only tax on wealth (defined as an asset) is the property tax.  However, they do not refer to this and with good reason – the property tax will attract revenue from high income groups.  So Labour is not referring to tax on wealth but rather on personal or capital income.

The list that Labour has been putting forth includes:  a mansion tax on properties worth over €1 million (this is a small tax on wealth), an increase in the USC on high-income pensions, extending PRSI to trade and unearned income, reducing tax reliefs for large pension pots, an increase in Capital Gains tax, Capital Acquisitions tax and Deposit Interest Retention Tax (DIRT), etc.  So does all this add up to €500 million?

Let’s look at the measures that will be introduced in Budget 2013.

In the above measures we find that €114 million will be raised in 2013 with a full year yield of €174 million – though this latter figure is slightly inflated by an extension of the PRSI base on to unearned income that won’t be introduced until 2014.

This seems a long ways away from the €500 million package Labour has referred to.  What else could there be, that is not captured by the table above?

Deposit Interest Retention Tax:  This has been referred to as a tax on high incomes and clearly high income groups are more likely to hold more cash than the rest of us.  However, low and modest income groups also have deposits.  And the tax rate is somewhat quirky.  If interest on deposits were included in the income tax regime, low-modest income groups would pay only 20 percent while those on the top rate would pay 41 percent.  As it is, low-average income groups pay more under DIRT and high-income groups pay less.  Nonetheless, let’s allow this a tax on high-income groups, knowing that others will be caught.

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Hopeless Forecasts

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Forecasts are never the most important part of Budget process.  Although the natural tendency to focus on projections of growth and the deficit is magnified now by a widespread hope that there might be an end to economic misery, Budget forecasts are not the place to look. Currently the Department of Finance is forecasting that in 3 year’ time GDP will almost be back to where it started 8 years previously in 2007. But GNP will still be more than 4% below its pre-recession peak, according to official forecasts.

How much credence should be given to official projections? Not much. The chart below is taken from September’s Fiscal Assessment Report (FAR) and shows the level of forecast error for GDP in official presentations two and three years hence. The official record on forecasting GNP is much worse, as the domestic economy has parted company from the MNC profits-inflated level of GDP.

Likewise with projections of a fall in the deficit. To give just one example, not the most egregious, the Addendum to SPU of January 2009 forecast that the deficit would be eliminated altogether in 2012.

It seems more likely that Budget documents serve a political rather than a forecasting purpose. Certainly, no business presenting its accounts would be allowed to routinely begin its table of data from a year that is not yet complete- in this case 2012- without reference to the actual outturn in the previous year. Yet this is the norm (although it must be sad, not solely in Ireland).

Successive governments have long abandoned any notion that policy is about fostering growth but repeatedly insist instead that it is about reducing the deficit. Yet according to the Budget documents the deficit (General Government Balance as per EU accounting rules) was 8.2% of GDP. This is almost 1% of GDP higher than the deficit in 2008, when austerity began.  According to the government’s own White Paper on estimates for 2013, without the further fiscal tightening of the Budget the deficit would rise to 8.9% of GDP. Any deficit which requires constant application of new measures can hardly be said to be on a sustainable downward trajectory.

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Ireland’s Leftward Movement

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I spent a few hours analysing election results and the Red C Opinion Poll of Sunday Dec 2rd, 2012. This was done to see whether or by how much the left is getting stronger.

In my method I’ve categorised the Labour Party as left for the analysis, based on their potential to be so in the main, and by virtue of their stated policies in the past. I've also categorised  independent TDs and TDs from smaller parties as either part of the broad ‘left’ or as part of the broad ‘right’, depending on their ideology.

I’ve obviously categorised FF and FG as one on the right. I've done this for four elections (elections 81, 87, 97, 07, 11) and the opinion poll of Dec 2rd, 2012. This has yielded some very interesting results, as follows:

1981: Right 81%, Left = 19%
1987: Right 85%, Left=15%

1997: Right 76%, Left=24%
2007: Right 75%, Left=25%
2011: Right 60%, Left = 40%
2012: Right=57%, Left 43% (Red C Poll Dec 2nd)

Here are just a couple of observations: The tide has turned towards the left progressively since 1987 and particularly since the 2007 election, just before the recession started. However, this move started from 1987 to 2007 (15% to 25% left) and not during another tough and protracted period of austerity from 1981 to 1987, the question is why?

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06-12-2012 16-26-052

Labour’s Magic Numbers

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Eamon Gilmore claims that Budget 2013 is fair. He told RTE that, “This Budget… will produce over €500m in additional taxes on wealth…It’s the largest package of tax measures on wealth in this country that I have seen in my 23 years in the Dáil.”

During the Dáil debate on the Financial Resolutions on budget night Gilmore claimed that these measures “would raise €646 million in a full year”.

Unfortunately the Labour leader has produced no figures to support his claim.

Will individuals or households earning over €100,000 per year pay €500 million to €646 million in extra taxes as Gilmore claims? The answer for 2013 is a straight no. The answer for 2014 is far from clear.

Of course taxing wealth and taxing the wealthy are not the same thing. To know how fair the tax proposals in the budget really are we need to know how much will be paid by the wealthy.

Very few of the tax proposals in Budget 2013 specifically target high earners or those with significant levels of wealth

The 3% USC increase on pension incomes and the ending of top splicing relief will clearly impact on those whose wealth is above average, including some very wealthy people.

The changes to capital gains, capital acquisitions and deposit retention taxes again would impact a range of income groups, though one can reasonably assume the bulk of additional revenue under these headings will come from those whose wealth is above average, again including some very wealthy people.

But let’s give Eamon Gilmore the benefit of the doubt and say that all of the projected income under these measures will come from the wealthy. For good measure let’s also throw in the €1 million to be raised from the benefits in kind on preferential loans.

In 2013 these measures are projected to bring in an additional €156 million and in 2014 a total of €179 million (see Table 1).

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