Monthly Archives For September 2013

Sea of Debt


Come with me, my payee / To the sea . . . the sea of debt / I want to tell you / How much I owe you

Do you remember when we met? / That’s the day I went into debt/ I want to tell you / How much I owe you

With apologies to Phil Philips but his great song came to mind when I read this little stat in the Fiscal Council’s latest publication, The Government’s Balance Sheet after the Crisis: A Comprehensive Perspective

‘Ireland had the fourth highest debt ratio in the Euro Area in 2012, whereas in 2007 Ireland had the second lowest ratio. (Only three Euro Area countries had debt-to-GDP ratios in excess of Ireland’s at end-2012 according to Eurostat estimates: Greece (156.9 per cent), Italy (127.0 per cent) and Portugal (123.6 per cent).’

Well, I guess that’s what happens when you bail-out insolvent businesses while at the same time pursuing austerity policies that actually increase the debt.  But I’m afraid it’s worse than the bald numbers the Fiscal Council presents.

There are different ways to measure debt – as a percentage of GDP, GNP, etc.  But let’s measure it as a burden on people – for its people who pay off debt.  When we look at debt per capita this is what we find:


Ireland is at the top, head and shoulders above all other countries – in particular, Italy, Greece and Portugal which the Fiscal Council refers to as countries with a higher debt when measured as a percentage of GDP.  Why the difference?

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Five Years After the Bank Guarantee And Still Nothing

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Five years after the blanket bank guarantee which led to a €69 billion bank bailout being foisted on the people, the Irish haven't come out in mass protest to demand justice. Jasmin Marston, through a series of interviews with Irish people which was undertaken as part of her research for a MSc in International Relations, tries to find out why. 

So where were all the angry Irish? More often in pubs than on the street? Maybe. To explore the reasons of the lack of overt contention I decided to write my thesis on the subject and interviewed some of the smart and active folks from Ireland to get a better understanding.

The factors were summed up by one respondent:

“It is more like a nuclear reaction… our perfect storm.”

The following article is an overview of my research, which included 18 interviews and a plethora of readings, shedding some light on why Ireland has seen only limited amount of protests against the bank bailout and austerity measures forced upon them over the past years. 

Fear, hopelessness and guilt

  for men to plunge headlong into an undertaking of vast change they must be intensely discontented yet not destitute” – Hoffer, The True Believer (1951:7)

People in Ireland seems discontented yet, as interviewee 14 put it “anger has been paralyzed by fear” and adds that it’s a fear linked to the level of indebtedness.  

In fact, Irish households accumulated large debts to fund purchases of property (which now have fallen sharply in value) during the boom fueled by cheap, available money from Europe. Some 80% of the 200,000-350,000 households estimated to be in negative equity are thought to be first-time buyers. The younger age group is hit particularly hard (people in their late 20’s, 30’s and 40’s), and might have bought into the guilt-laden approach presented by Brian Lenihan (former Minister of Finance) responding to a question of responsibility by an RTÉ reporter with let’s be fair about it, we all partied’ (Lenihan, 2010).

Interviewee 15 states: a lot of people feel that they lost control of themselves, they spend too much money, they borrowed too much money – I think there is a bit of guilt out there.”

For now it seems people “just desperately hoping that this will pass” said interviewee 1.

If you believe what [the government] tells you, you can be at peace with things. Because they tell us everything is going to be ok, because we are doing the right thing.” Interviewee 16

A vital part of getting involved, for example in a protest, is the feeling that one’s involvement would matter (Passy and Giugni, 2001), yet often a sense of hopelessness in changing the situation is present in Ireland, echoed by interviewee 17: “if I thought there was a way I could actually achieve something […] I would get involved”.

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This Green Paper should never become a White Paper

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This post was originally published today on Raymond Deane's blog The Deanery

Alan Shatter, in his capacity as Minister for Defence, has produced a Green Paper in anticipation of a “White Paper on Defence [which] will be completed early in 2014 and will set out Ireland’s Defence policy framework for the next decade.”

The Green Paper explicitly claims to “give expression to an active vision of our neutrality” (section 1) entailing “a willingness to project Irish values and priorities including the promotion and preservation of peace, disarmament, human rights, and support for humanitarian operations through the development and deployment of the Defence Forces…” However, this unexceptionable statement is followed by a less reassuring one: “Ireland’s approach to security is underlined by its engagement in EU Common Security and Defence Policy…” The Paper never comes to grips with the contradiction between “neutrality” and commitment to an “EU Common Security and Defence Policy”.

It goes without saying that the most flagrant violation of Ireland’s traditional military neutrality – the de facto delivery of Shannon Airport to the US Air Force as a transit hub for its troops flying to wars in the Middle East and elsewhere – merits not a single mention in the Green Paper; this is probably its most eloquent omission.

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Take-Home Deprivation

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There is a common assumption that deprivation is a condition associated with unemployment.  But if you get a job, you can work your way out of poverty and deprivation.  That is the theory, anyway.  However, there are huge swathes of households where income from work is not enough.  We have high, and growing, levels of deprivation among in-work households.  Welcome to the new way of working – take-home pay with take-home deprivation.

The CSO sets out a menu of deprivation indicators in the EU Survey of Income and Living Conditions.  If an individual suffers two or more of these conditions, they are included in the deprivation rate.

Without heating at some stage in the last year • Unable to afford a morning, afternoon or evening out in the last fortnight • Unable to afford two pairs of strong shoes •  Unable to afford a roast once a week • Unable to afford a meal with meat, chicken or fish every second day • Unable to afford new (not second-hand) clothes • Unable to afford a warm waterproof coat • Unable to afford to keep the home adequately warm • Unable to afford to replace any worn out furniture • Unable to afford to have family or friends for a drink or meal once a month • Unable to afford to buy presents for family or friends at least once a year

Deprivation throughout Ireland is on the rise.  In 2008, the first year of the recession, 13.8 percent of all individuals were officially categorised as deprived.  In the last year we have data for, 2011, deprivation increased to 24.5 percent.  Over 1.1 million Irish people now suffer multiple deprivation experiences.  This is grim.


The loss of employment, combined with cuts in social protection income, has been a major contributor to the growth in deprivation.  However, another major contributor – and one which is rarely referred to – is the rising levels of deprivation among those in work.

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Wealth Tax: Options for its Implementation In the Republic of Ireland

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The idea of imposing a wealth tax in Ireland is not a new idea. As well as being widely debated throughout the austerity years it has formed part of recent pre-budget submissions from Sinn Fein and the United Left Alliance. Much of the criticism of such proposals are based upon the unassailable fact that it is considerably difficult to gather data on wealth in Ireland even though it is perfectly obvious that wealth distribution is heavily skewed in favour of a small, but powerful minority. The lack of will on the part of government to rectify this information gap is illustrated by the fact that the CSO’s “Household Finance and Consumption Survey”, which will include, a survey of wealth will only become available in 2014, six years after the first austerity budget was introduced.

Basing their proposals on the various bank survey’s and Central Bank of Ireland data has resulted in different assessments of how much such a tax would gain for the exchequer annually. However, in challenging the ULA’s proposal of a 5% tax on wealth the economist Seamus Coffee has estimated that it would be possible to get an annual tax income of €1 billion. This estimate was based on an assessment of the available information and a comparison with the income earned from the French wealth tax. Given the less damaging impact on the economy of such a tax when compared to further reducing the incomes of the majority of households (those earning less than 40K), this is a considerable haul.

Now, Tom McDonnell of TASC in a working paper for the NERI Institute has put together a proposal for a wealth tax that tries to overcome the limits and problems with wealth taxes as they exist in other countries at the moment. It also examines the available data and provides an indicative estimation that the top 5 per cent in the wealth distribution holds 28.7 per cent of net household assets. This leads to an estimation that the net wealth of the 97.5 percentile of Irish households is €749,000.

Below is a briefing paper on the proposal and here is a link to the paper itself.

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Peadar O’Donnell Socialist – Republican Forum, Sat 28 Sept @2pm, New Theatre, East Essex St

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Peadar O’Donnell Socialist – Republican Forum

Launch of Pamphlet

“Undoing the Conquest: Renewing the Struggle”

Main speaker: Bernadette McAliskey

Other speakers:

Tommy McKearney
Eugene McCartan

Chairperson: Mick O’Reilly

2.00pm, Saturday 28 September 2013

The New Theatre, 43 East Essex Street, Dublin 2

The pamphlet contains the papers presented to the seminars organised in Dublin in 2012.  

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Disincentive to Work? What Work?

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Are you getting tired of unsubstantiated claims that social protection payments are a disincentive to taking up a job?  Me, too.  These assertions pass for informed commentary on the unemployment crisis, using crude calculations and even cruder assumptions about social behaviour.  Let’s throw some light on this dismal debate.

It is claimed that welfare payments make up too high a proportion of take-home pay from work, and that this is stopping people from taking up work.  This, in turn, is helping to maintain high unemployment.  This is called the ‘replacement rate’.  If you earn €100 and social protection payments are €60, the replacement rate is 60 percent.   If the replacement rate is too high, you get disincentives.  When this happens, you have to do something (this usually means cutting social protection payments) in order to reduce the replacement ratio.

Let’s examine the replacement rates from two years – 2012 and 2007.  With the help of the Citizens Information Board’s budget summaries and the TaxCalc calculator I will focus on a two-adult household with three children since the main complaints re: welfare disincentives usually focus on large households.  We will compare them with the household take-home pay on the minimum wage, along with average take-home pay in the retail sector and the overall economy (one work-income earner).


The replacement rates were higher in 2007 than they were in 2012.  With average earnings, social protection payments made up 66 percent of take-home pay in 2007; in 2012 they made up 63 percent.  There were similar falls in the replacement rate for average retail earnings and the minimum wage.

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The Party’s Over

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The latest GDP data were a disappointment. The world economy recovered a little around the middle months of this year. And some surveys suggested that, despite austerity, this meant Irish GDP growth recorded in the second quarter would be a bit stronger than the outturn of +0.4%. Worse, as Michael Taft points out, GNP actually contracted by the same amount in Q2.

The economy is still 9.5% below its previous peak at the end of 2007. Any talk of recovery is therefore entirely misplaced.

But it is strange that while we are halfway through the sixth year of the Irish Depression there remain a number of myths regarding the causes of the slump. One of the most prevalent of these is that the entire preceding boom was driven by solely by a housing bubble and that its bursting is unavoidably the main factor in the subsequent crash.

The chart below shows the real output of the different sectors of the economy since the beginning of the Depression. Building and construction is shown in yellow. Clearly it has contracted sharply, almost to nothing. But is also clearly not responsible for the entirety of the slump.


In fact this real measure of changes in output shows that building and construction has not even registered the largest decline in output. The table below shows the change in output of the different sectors of the economy.


Change in Real Output from Q4 2007 to Q2 2013, €bn


Industry has clearly contracted more in terms of real output than any other category and is nearly responsible for half of the total fall in output. The total for the services category is somewhat misleading as this includes rent, which has continued to rise throughout the slump.

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Meeting Room: 2010 Documentary on Concerned Parents Against Drugs Movement Now Available Online

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Meeting Room, the 2010 documentary film by James Davis and Brian Gray about the Concerned Parents Against Drugs movement is now available on YouTube.

As Padraig Yeates, author of Lockout: Dublin 1913 and one of the contritutors to the films says: “This film rescues one of the most important social movements in Dublin’s history? from oblivion.”

The following is taken from a press release to announce it's showing in the Dublin International Film Festival in 2010, posted on Cedar Lounge Revolution.

“The film shines a powerful searchlight on a controversial moment in recent Dublin history. Meeting Room tells the contested story of the Concerned Parents Against Drugs movement from its emergence in Hardwicke St and St Teresa’s Gardens in the early 1980s to its decline with the imprisonment of some of its leaders at the end of that decade. The film includes an interview with Tony Gregory and features Christy Moore, John ‘Whacker’ Humphries, Bernie Howard, Mick Rafferty, Padraig Yeates, Chris McCarthy and Fr Jim Smyth.

CPAD began in response to the explosion of drug addiction in Dublin in 1982. A lack of action from the authorities meant that residents of the flats complexes where heroin was available were on their own. A mass movement was born in response and dealers were confronted with meetings, patrols, checkpoints and late night evictions. These tactics saw the movement spread throughout the city.

But CPAD’s direct action strained its relationship with the authorities and the media. Charges of vigilantism and republican infiltration dogged the movement and undermined it. Hostility in the press, prosecution in the courts and a violent response from criminals was all balanced against successfully tackling the dealers as the movement rose and fell during the 1980?s in Dublin.

Beautifully shot by Palestinian American artist Nida Sinnokrot, Meeting Room reconstructs the social history of CPAD through archival newspaper, film and photographic sources and through the voices of those who participated.

Embedded below.

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ICTU: Denying Sex Workers a Workers’ Identity


Wendy Lyon of Feminist Ire on a move by ICTU to deny sex workers a “worker” identity.

Earlier this month, the Irish Congress of Trade Unions did something even its critics may not have anticipated. It took part in a meeting aimed at advancing a campaign to deny certain workers – among the most marginalised in Irish society – the right to a “worker” identity. The meeting was announced in a tweet by the Turn Off the Red Light campaign, accompanied by a pronouncement that “Prostitution is not work”.

This position should concern anyone who looks to trade union bodies to defend access to labour rights. For if sex work is not work, then sex workers are not workers, and are not entitled to the rights that that status conveys. Surely the role of trade unions is to promote greater access to those rights, not to decide who is eligible for them?

ICTU’s stance puts it at odds with the International Labour Organisation, to which it is affiliated. While the ILO is officially neutral with regard to the legal status of sex work, it has explicitly stated that labour rights should apply to that industry. An example is its confirmation last year that sex workers are covered by its Recommendation concerning HIV and AIDS and the World of Work, 2010 (No. 200). This Recommendation, like many of the ILO’s, is stated to apply to “all workers working under all forms or arrangements, and at all workplaces, including persons in any employment or occupation”, and “all sectors of economic activity, including … the formal and informal economies”.

New Zealand, which decriminalised its sex industry in 2003, shows what labour rights for sex workers might look like in practice. Its Prostitution Reform Act explicitly protects sex workers in a number of ways:

  • The right to insist on condom use (Section 9)
  • The rights applying to workers under the Health and Safety in Employment Act (Section 10)
  • The right to refuse any client or service, at any stage of the transaction (Sections 16 and 17)

The Act was drawn up with the input of sex workers, and the research into its impacts has reached remarkably positive conclusions. Most striking are these figures in a 2007 study by the Department of Health and General Practice at the University of Otago (Christchurch) :


Why wouldn’t any trade union see it as positive that so many people who earn their living in a traditionally unprotected sector would now feel that they have rights too? Why wouldn’t any trade union want them to have these rights?

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Since the Government Took Office

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So we’re out of recession.  But, as the Minister for Finance warned, we shouldn’t start throwing our hats in the air.  We’re still in a domestic demand recession with investment falling.  Consumer spending increased slightly but is still the second lowest quarterly return since the recession (the first being in the first quarter of this year).  Exports up but Government spending goods and services down.  Narrow definitions of recession are less and less help in describing the situation we find ourselves.

Let’s take a step back and look at how things have been going since the Government took office – at the beginning of the second quarter of 2011.  Of course, one can’t expect any Government to turn things around immediately after they enter office, but after two years we should start some signs of something – especially since even in the middle of 2011, we were being told by Ministers that we were back on the road to recovery.  So where are we on that road?


GDP is marginally below the level when the Government took office.  Domestic demand is significantly below – more than 5 percent.  Exports are slightly up at 2 percent.  In terms of the overall economy we are stuck in the same place on the road, not having moved in two years.  The short-had term is stagnation.

Looking at the components of domestic demand – which makes up 75 percent of the economy – we find:


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Don’t Ask What the Business Sector Can Do For Ireland

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In the run-up to the budget all manner of proposals are being put forward –tax measures, spending cuts.  We debate what sacrifice this or that groups can make to bring us to the bail-out targets.  There is no end of combinations and computations.  But the one thing that is totally off the table – the one thing that we should never, ever mention – is what contribution the business sector can make to repairing the public finances.  Pensioners, the unemployed, low-paid, families – we debate the different ways they can make continued sacrifices.  But the business sector has been ring-fenced, protected, safe-guarded.

The following estimates what contribution, in terms of tax and social insurance revenue, the Irish business sector could make if it made the same contribution as the average business sector in the EU-15 – and how little Irish business actually does contribute.

Corporate Taxation

Never mind nominal tax rates – it is the effective tax rate that matters; the percentage of taxation on profits when reliefs, allowances and exemptions are taken into account.  Tom Healy, Director of the Nevin Economic Research Institute, has an important post on this subject – pointing out that there are different benchmarks in assessing the effective tax rate.   For the purposes of international comparison, I will use two estimates:  net operating surplus and net entrepreneurial income.

Net Operating Surplus:  this traditional measure of profitability is the amount of value-added left to companies after payroll costs and consumption of fixed capital (decline in the value of fixed assets); in short, sales minus costs.  This is from Eurostat – here and here:


Ireland, unsurprisingly, is at the bottom of the table.

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