Monthly Archives For October 2013

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REMINDER: Left Forum – Does the left need a new party? on Saturday the 2nd of November starting at 10.30 at the Teachers’ Club in Parnell Sq.

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REMINDER: Left Forum – Does the left need a new party? on Saturday the 2nd of November starting at 10.30 at the Teachers’ Club in Parnell Sq.

The Left Forum is organising a meeting to discuss the question: ‘Does the left need a new party?’ on Saturday the 2nd of November starting at 10.30 at the Teachers’ Club in Parnell Sq.  Come for part or all of the day.  Hope to see you there!

The schedule is as follows:

10:30 Registration

10:45 Panel of speakers representing diverse points of view on this question

Chair: Alan Myler (WP)

Speakers: Gavin Mendel-Gleason (LF), Eoin O Broin (SF), Paul Murphy (SP), Cian O Callaghan (I), John Lowry (WP), Joan Collins (UL), Tom Redmond (CPI), Seamus Healy (WUA), Mark Hoskins (WSM), Richard Boyd Barrett (SWP)

12:00 Q & A / points of view from the floor / indicative vote

1:15 Lunch

2:30 World cafe discussion groups

3:30 Plenary

Chair: Helena Sheehan (LF)

5:00 Conclusion

The event will be televised by DCTV

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Breaking the Link? It’s Getting Stronger. It’s Strangling Us

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While Eurozone Governments continue to debate the details of the banking union; while the Irish government continues to insist that the deal reached last year includes bailing us out for past bank debt; while commentators debate and measure the link between public and banking debt; while the ECB steps into the void with its own peculiar version of ‘breaking the link’ between banks and states – while all this is going on, that game-changer which would break the link between state and banking debt is becoming ever more elusive.

With the latest data from Eurostat we can track the impact of banking debt on the public finances of Eurozone governments.

Impa_bank_crisis1

2010 was the worst year – with plucky little Ireland contributing nearly half of the total €66 billion.  It eased off in 2011 but it came back with force in 2012.  In total, the banking debt has cost the Eurozone €138 billion but this is just the Eurostat’s accounting of the largely capital impact on General Government Debt.  It doesn’t include interest payments, cost to wealth funds (such as Ireland’s National Pension Reserve Fund) or the impact of contingent liabilities, never mind the impact on the economies in general.  So this is a narrow accounting of a cost which is much, much higher.

Who got hit in 2012?  Ireland didn’t.  In fact, we recorded a small income increase due to bank repayments (€1.6 billion).  The main victims, however, can be found in the periphery.  Spain, Greece and Portugal accounted for 86 percent of the net impact on the Eurozone in 2012.  Spain, in particular was hit, with an impact of €39 billion on their public books.  But other countries got hit: Belgium, Germany, Austria, France and the UK with minor impacts in other countries.  In short, 2012 was the second worst year since the crisis began.

But the fun doesn’t stop there.  There are two more tables which show the continuing bank-debt burden on the Eurozone.  First, is the relationship between the stocks of government financial assets and liabilities arising from the support of financial institutions in the crisis.

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A Dialogue on Democracy and the Republic – Part One

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Renewing the republic, rebuilding the republic, a new republic, a Second Republic, how stands the republic: it all circulates in the verbal debris of Ireland’s political and economic crisis, but what does all this republic stuff mean nowadays? And what is to be done with it? I wanted to pursue the idea of the republic in relation to the wider Eurozone crisis. What follows is the first part of a dialogue with philosopher Juan Domingo Sánchez Estop on the idea of the republic.

UPDATE: Part 2 of this dialogue is now available here.

Juan Domingo Sánchez Estop taught modern philosophy in the Universidad Complutense de Madrid from 1981 to 1986. He translated Spinoza’s correspondence into Spanish and, as a member of the Association des Amis de Spinoza, has taken part in seminars and congresses in France and Italy. He is currently working as a senior translator in the Council of the European Union and is specialized in foreign policy matters. He is an advisory editor of the review Décalages (on Althusserian studies). He writes in European and Latin-American publications on Spinoza, Althusser, modern philosophy and political philosophy. His latest book is La dominación liberal (Liberal Domination. Essay on liberalism as a power apparatus) (Tierra de Nadie, Madrid, 2010). He is currently linked to the Philosophy Center of the Université libre de Bruxelles, where he is preparing a PhD on Spinoza in Althusser. His blog, in Spanish, is Iohannes Maurus.

Richard McAleavey: The explosion of the 15-M in the Spanish State in 2011 began with the slogan Real Democracy Now! as its focus. It appealed to the sense among growing sectors of the population that the existing political order, despite claims to the contrary, was not democracy, given that decisive political power rested with powerful political and financial elites. This conflict opened up between ‘real’ and ‘fake’ democracy -between the appearance of the multitude in public squares and the police forces sent in to batter and criminalise and protect the existing regime- in seems to support Jacques Ranciere’s assertion that ‘democracy is not a form of state’.

Juan Domingo Sánchez Estop: One of the main problems the 15M had to face after its sudden appearance is the lack of a real political culture. There was indeed an important pars destruens in the action and the reflection by the 15M: they recognized, after decades of the so-called “culture of the transition” based on the idea of a “consensus on the need for a consensus”, that no democracy could ever work without a real place for antagonism.

Unfortunately, in post-Franco Spain, a tight consensus was imposed by both Right and Left on two basic tenets: that there is no alternative to market economy and that a very particular brand of representative democracy based on strict partitocracy, with hardly any direct political participation from the citizen, was the only game in town. Beyond these limits lay the Hell of economic “irresponsibility” and, even worse, the Hell of terrorism. All the anti-democratic features of the Spanish regime could be in some way or other concealed behind the “necessary compromises” of the “young democracy”, but after more than three decades, the much admired “young democracy” didn’t grow into an actually democratic form of government. In a country where the Left traded real citizens’ empowerment in for its integration in the system and a broad liberty in moral matters -as symbolized by Madrid’s “movida” and Almodovar’s films- everything remained quiet until the advent of the crisis.

There is no doubt that the 2008 financial and economic crisis revealed the regime as what it really is to large social sectors, mainly younger educated people, most of them the sons and daughters of working class families. For one month the 15M occupied the central square of Madrid, the Puerta del Sol, in some way imitating the north-African movements against tyrannical and semi-colonial dictatorships. People suddenly noticed a certain parallel between despotic oligarchical regimes and what until then had featured as a European democracy. Like in the neo-colonial world, the Spanish government acted in behalf of economic and financial powers entirely alien to the Spanish people, which saw itself obliged to pay back a debt it had never decided to take out. The very difference between what democracy is supposed to be, i.e., empowerment of the citizens and active participation in public decision-making, and the reality of an autocratic pro-finance regime became apparent. And people reacted.

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How to Cut Social Protection While Claiming to Protect It

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Don’t be taken in by the spin.  Social protection payments have not been protected.  Not ‘core’ payments, not ‘non-core’ payments, not any payments.  They have been cut in actual terms, they have been cut in real terms, they have been cut in value.  This is why people’s living standards continue to deteriorate.   The Government claims they are protecting social protection payments.  This claim is false.

Before we get into the main argument, though, let’s clear something up.  When people complain that social protection payments are actually being cut – like Child Benefit, rent supplement and other programmes – the Government insists that the only social protection payments they were referring to was ‘core’ payments, or ‘basic’ payments or (and I’ve heard this used) ‘core, basic’ payments.  This is not true.  This is what the Programme for Government states:

‘We will maintain social welfare rates.’

There is no mention of ‘basic’ or ‘core’ in any other adjective.

Nonetheless, ‘core’ social protection payments been cut and I’m not just referring to payments to young people or invalidity pension to those aged 65; all core payments have been cut in the real world we live in.

My €100 this year is cut by the level of inflation next year.  If inflation runs at 2 percent, then my €100 is cut by 2 percent.  It is now worth only €98.  I can only purchase €98 worth of goods and services. My living standard falls.

This is what is happening with all social protection rates.  And the cuts are considerable.  Let’s look at a few examples involving households without children.

RealCuts1

The Government’s failure to protect social protection payments has resulted in substantial real cuts (after inflation) in social protection payments.  For a single pensioner, the cut is over €39 monthly while for a pensioner couple it is nearly €75.  For the unemployed, it has been between €32 and €53 for single and a couple respectively.  Those on carers’ benefit have experienced a cut of €35 monthly.  These all represent a real cut of 3.8 percent.  This is substantial if you are on the poverty line.

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Breaking a Cycle

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This post was originally published on the 28th of October on the comradezhenka blog.

Socialists, Protests and Strategy

The last few years has seen a lot of frenetic political activity, there have been countless protests and mobilisations without much success in many of them. There were of course some obvious exceptions, the early CAHWT demos and more recently the Coillte protests The unions had organised some very big demos but they’re now in the distant past, and the recent ones are more a case of being seen to do something, rather than actually doing something. It seems like there has been an endless round of activism and it appears people are simply moving from one protest to the next. Every new cut in services is met with a protest, every attack on the working class is met with a demo. There are a lot of very good people putting a lot of effort into these activities. Unfortunately it seems as if we’re simply chasing our tails and one of the results of this is that the numbers attending have, in general, been declining. The lower numbers and the lack of substance to back up the demos ultimately leads to demoralisation and a downward spiral.

If you ask someone outside of the left what the left does, the answer is usually ‘protest’. Is that all we stand for? Of course not. We do however need to move beyond the cycle of tactical actions. Rather than objecting to every single manifestation of ‘austerity’ we need to develop an overall strategy for tackling capitalism. This means we need to break the current cycle of protests. We need to take a step back from the current level of activity and analyse what has worked over the last few years and what hasn’t. It is important we don’t get bogged down in the usual protest-recruit cycle that other groups thrive on, but ultimately leads to a dead end as there’s little substance to back it up. We need now to develop that substance. This is naturally going to be a long process involving as wide a range of voices on the left as possible. It certainly won’t be glamorous and will most likely be boring, but it’s vital for our long-term interests that we break this cycle and get back to some serious thinking.

This is not to say there should be no protests, but that we should pick and choose our battlegrounds more carefully. There are a myriad of cuts and attacks on the working class happening now under the guise of austerity, and we shouldn’t be looking to protest every last one of them. Simply put we don’t have the numbers to tackle each one of them individually. We have been trying to do this, and the result of it is diminished numbers at these demos. In my opinion this has the net effect of making the left appear weaker than it actually is. I know this won’t be a popular idea, but the left is thin on the ground and further dividing our strength by the sheer volume of (and sometimes competing) demos doesn’t serve us well. We simply don’t have the strength of numbers required to attend every protest, and in truth everyone knows the low turnouts make us look weak. We need to strategise our demonstrations, we need to decide what our priorities are and then take each invite to a protest and decide whether it fits into our strategic plan.

This will necessarily involve making some tough decisions. Nobody wants to turn away from any members of the working class that are under attack. But it must be done. We have to find other ways of supporting those groups, because truth be told having 300 people turn up to protest a cut in, for instance, the education budget does that group no favours at all. Ultimately it shows that those protesting aren’t strong enough to defeat the cuts, and makes them ripe for further cuts in future. I know some people will say that having 300 there is better than having no one, but really it isn’t, it amounts to the same thing: There is not enough force there to prevent the cuts.

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Dublin Launch of the 2nd Edition of Conor McCabe’s Sins of the Father, Weds 13th Nov, @6pm Liberty Hall

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The Dublin Launch of the 
2nd edition of 
Conor McCabe’s Sins of the Father: Tracing the Decisions That Shaped the Irish Economy
is on:
Wednesday the 13th of November
at 6pm,
in Liberty Hall.
With guest Vincent Browne
 
The event is hosted by the Young Worker Network
The book is currently available as an e-book. Copies should be in shops shortly.

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The Bottom Dog Bites Back – Call for Articles

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The Bottom Dog, a publication of the Limerick Council of Trade Unions, was first published on 20th October 1917. The paper brought together the forces of industrial unionism and radical elements among the craft unions. By the time the Dog's first editor, Ben Dineen, died in November 1918, forty-eight editions of the paper had been published. The Dog began its life in order to represent the interests of the oppressed (the “bottom dog”), whether oppressed in terms of class, race, nation, sex or otherwise.

Always and everywhere the Dog worked to expose social injustice and to highlight the plight of those whose stories are omitted in polite society, insisting that the “bottom dog would only come into his own when every worker, male and female, was thoroughly organised”. The Dog has always attempted to give voice to the oppressed and has always focused its attention on issues such as bad housing, low pay, unemployment and poor working conditions.

Since the attacks on the working class are as fierce as they have ever been, The Dog is now ready to return as a quarterly publication (from December 2013). The current editorial team is determined that when the Dog returns it will bite hard. With sincere respect to the history and spirit of the publication we take the 1975 editorial statement as our starting point:

“The Bottom Dog is not a platform for any political party or faction. It is rather a forum open to all workers who wish to contribute articles or ideas etc. The paper covers issues where the working class is under attack or on the advance e.g. redundancies, unemployment, wage freezes and attacks on workers' rights, repression, sex discrimination and womens' rights, strikes, sit-ins and trade-unionisation, especially when they relate to, affect, teach lessons or show the way forward for workers in this country.”

The Dog aspires to be a voice of, and for, the working class – a space where workers, activists, scholars and all others committed to furthering the interests of the working class as a class, can develop and disseminate ideas, and prepare for the struggles ahead.

To this end, The Bottom Dog is currently inviting article contributions. These will normally be 250-700 words. All submissions and expressions of interest can be sent to bottomdog@limerickcounciloftradeunions.com. Accepted articles will be published in the printed edition or/and on our website: http://www.limerickcounciloftradeunions.com/apps/blog/

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The Cash Hoard of Western Companies

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This post was originally published on Socialist Economic Bulletin on Monday the 21st of October.

Supporters of ‘austerity’ would have a very strong argument if there really were no money left. In that case, opponents of current policy would be left arguing only for a fairer implementation of those policies, or that perhaps they could be implemented more slowly.

This is not the case. Firms in the leading capitalist economies have been investing a declining proportion of their profits. This is the cause of the prolonged period of slow growth prior to the crisis and a number of its features such as stagnant real wages, so-called ‘financialisation’ and the growth in household debt.

This negative trend of declining proportion of profits directed towards investment reached crisis proportions in 2008 and is the cause of the slump. As a consequence of the sharp fall in this investment ratio there has been a sharp rise in the both the capital distributed to shareholders and in the growth of a cash hoard held by Non-Financial Corporations (NFCs). This cash hoard is a barrier to recovery, releasing it could be the mechanism for resolving the crisis.

The chart below shows the level of surplus generated by US firms (Gross Operating Surplus) and the level of investment (Gross Fixed Capital Formation) for the whole economy. Since the former are only presented in nominal terms, both variables are presented here in the comparable way.

Fig.1

US_surplus

The nominal increase in profits has not been matched by an increase in nominal investment. In 1971 the investment ratio (GFCF/GoS) was 62%. It peaked in 1979 at 69% but even by 2000 it was still over 61%.

It declined steadily to 56% in 2008. But in 2012 it had declined to just 46%.
In a truly dynamic market economy there is nothing to prevent the investment ratio from exceeding 100% as firms utilise resources greater than their own (borrowing) in order to invest and achieve greater returns.

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Cut to Maternity Benefit – Demo, Fri Oct 25, 1pm outside Leinster Hous

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The cut to Maternity Benefit is an attack on women and families. All statutory maternity benefit rates have been standardised to €230 per week for new claimants. For over 95% (23,000) of claimants it will mean a reduction of €32 a week which is a significant drop given the proven high costs associated with caring for an infant. This comes on top of the Budget 2012 measure to tax maternity benefit thereby reducing the real value of the payment further. In less than a year, the cut to maternity benefit is nearly €3,500 per mother. It will mean that mothers may have to return to their jobs earlier than they wish to. (Barnardos Budget 2014 Analysis)
SUPPORT THIS DEMO: 1PM, DAIL EIREANN
Bring Your Own Placards — Bring Your Kids

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Launch of David Cronin’s New Book: Corporate Europe, Sat 26th of Oct, 2pm @ Connolly Books

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Launch of David Cronin’s book
Corporate Europe
Saturday 26th October
2-00pm
Connolly Books

David Cronin’s new book Corporate Europe exposes the power of big business. It shows how an unaccountable elite is seeking to destroy the welfare state, weaken laws on public health and climate change and put weapons-makers in charge of our “security”.

During this launch, Cronin will highlight the cosy links between Ireland’s political representatives and the corporate lobbyists setting the EU’s agenda.

Saturday’s FB event page

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The War on Youth (2): Those Lazy, Lazy Kids

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Cuts in Child Benefit, Youth Programmes, school capitation grants, higher education, student grants, youth unemployment payments – the economic war on youth has run into hundreds of millions and cost the life-chances of hundreds of thousands: emigration, unemployment, falling wages. At the start of this crisis who would have imagined this war would have run for so long and been so destructive?

The first rule in an economic war is to discredit the victim.   One of the most malicious comments during this crisis was aimed at youth (though attacks on public sector workers were equally outrageous) and came from a Labour Minister:

‘What we are getting at the moment is people who come into the (social protection) system straight after school as a lifestyle choice. This is not acceptable, everyone should be expected to contribute and work.’

Yes, there are so many jobs available but our lazy, lazy kids choose to hang around the house in their underwater drinking Red Bull and watching DVDs all day.  We have to incentivise their indolent backsides.  And cutting youth unemployment payments is one of those ways.

It’s bad enough to suffer cuts – in public services, income supports, job, wages.  But then to be told that you are to blame . . . And then to be told that you are lazy, too . . .

This may make for some popularity among the Sunday Independent, populist, socially-vindictive set.  But it is wrong, terribly wrong, demonstrably wrong.  And it diverts attention from the real issues, as scapegoating is intended to do.

It has been pointed out by many commentators that there are approximately 32 unemployed for every job vacancy.  This is a national average.  It is likely to be higher for younger people who are disadvantaged in the labour market (e.g. less job experience) unless they possess skills in labour shortage areas.  This alone tells us a lot.  But there’s another way to approach this issue.

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The Fairy Tales of Kildare Street

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From The Trade Union Left Forum

The fanfares for the minister’s budget speech in the Dáil are now over. It was a cleverly written speech, with lots of spin, incomplete figures, and a drip-feed of cuts in the days following it.

The orchestrated sound-bites are designed to cover what is yet another savage attack on the ill, the old, youth, women, and workers in general. It gives priority to private health over public health, so driving people to private insurers and monopoly health-providers. Cuts to the subvention to public transport will only benefit private transport operators.

The budget is a further consolidation of the drive to make Irish workers a reservoir of cheap labour and to make Ireland a zone of precarious employment and retain it as a tax haven. In particular, young people have been the main targets of this strategy. The attack on young people and the cuts they will be forced to endure, including “workfare,” have now effectually reduced the minimum wage for those under twenty-five to €3.50 per hour.

But this budget is not merely a set of cuts: it is also a further consolidation of the strategy of making austerity permanent and irreversible that is being imposed by both Fine Gael and Fianna Fáil, which are loyal lieutenants and handmaidens of the ruling economic elite and the interests of the EU.

The Labour Party is now beyond repair and is paying the price for propping up the establishment. Opportunist forces will, predictably, attack the Labour Party and its representatives in the trade union movement, solely for their own electoral advantage. For what is clear is that, for all their detailed criticism of the nuts and bolts and the percentages, their critiques are firmly within the framework of the system itself and do not pose any real challenge.

The EU, ECB and IMF will be happy enough with this continued approach of making working people pay the price for the crisis. There is a total commitment to paying the odious debt and, more importantly, servicing that debt to the tune of €8 or 9 billion per year. They are guaranteeing a permanent return to the holders of debt bonds and monopoly finance capital and a massive transfer of capital out of the country into their coffers, an outflow of the people’s money so necessary for proper economic and social development.

The majority of organisations in the so-called “social pillar” are hopelessly caught up in the food chain, silenced or muted by their dependence on dwindling government money.

The Trade Union Left Forum believes that only a politically and organisationally rejuvenated trade union movement will have the strength to mount any challenge to the present course. The basic question regarding this budget and the establishment’s strategy, when you strip away the spin, is, Who stands to win and who loses? The movement needs to realise which side it is on.

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A More Equitable and Efficient Way to Roll Out Free GP Care

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I am a great fan of universality.  It binds people from all social constituencies through shared public provision.  It pools risk on the insurance principle.  It removes public goods and services from private markets and puts them where they belong:  in public markets.  And in the specific case of health services, free primary health redirects demand from expensive tertiary (hospital) care into more cost-efficient channels.  In other words, all pretty good.

The trick is how to roll-out free universal benefit.  This is made all the trickier when we are still in fiscal cutting mod.  Resources are tight and there is a great demand for other services, income support and investment.  In such a scenario the over-riding principle should be to

  • Roll-out universality in a way that maximises social benefits and economic efficiency

On this basis, the Government’s strategy fails.  For instance, the Government originally announced that the first stage of rolling-out free GP care would be to extend fee GP cards to all 60,000 patients suffering from long-term illnesses.  This was a sensible approach.  However, this seemed to hit a roadblock with the Attorney General claiming that extending free GP care on the basis of need rather than income would be open to legal challenge (this seems strange, especially as people with long-term illness get free prescription medicine).  While legislation has been promised to rectify this, the Cabinet was told last May that it would be up to 10 months before legislation could be introduced.  This probably accounts for the other delay – issuing free GP care to patients on the high-tech drugs scheme.

Ok, there’s a problem that will take time to rectify – though extending free GP care to children also requires legislation.  What would be the next best step?  Extending the benefit to everyone in a certain category (e.g. households with under-5s) regardless of income?   I would argue there is a better course.

The means-tests medical card thresholds have not increased since 2006.  This means that inflation has eroded the value of the threshold by a considerable amount.  For instance, the threshold for a couple with one child is €15,834.  This is gross, less income tax, USC and PRSI with some income exempt such as Child Benefit and Family Income Supplement.  Nonetheless, it is quite low.  That threshold was established in 2006.   If it has been inflation-indexed, that threshold should be eight percent higher in 2014.  This refers to the full medical cared – free GP visits and prescription medicine (minus the prescription charge).

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Financialization, Housing and Dublin: Protest Outside Arthur Cox

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Small protest today outside the offices of Arthur Cox, Earlsfort Terrace, to highlight the financialization of the city and the role that law firms such as Arthur Cox play in this process.

This was part of the Right to Housing and the City campaign which will be launched across Europe tomorrow, with the Dublin event taking place at 2pm at Custom House Quay. All welcome.

[Photo by Aubrey Robinson]

Mick Byrne also has a column in The Journal on the reasons behind the protest.

In all of the above cases, debt-driven owner occupancy sectors dominate the housing market. It is no coincidence that from Spain to Ireland and from Hungary to Latvia, property bubbles emerged after widespread privatisation of the social housing stock in the preceding decades. Nor is it by chance that these same countries typically feature over-priced, under-regulated private rented sectors, leaving families little option but to seek a stable home through home ownership. Conor McCabe, in his book Sins of the Father, describes Ireland as a place were the ‘need for a home has been replaced by the need for a mortgage’ – and the same could be said for many countries across Europe.

But the unhappy marriage between housing and finance goes beyond the owner occupancy sector. Throughout the last decade social housing complexes in Dublin and Limerick were to be redeveloped under ‘public-private partnerships’ that relied on private finance. The local authority would give public land to developers for free, and the developer would build new social housing units while making a tidy profit from the construction of additional private housing.

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