Tuesday, 16 November 2010

The Irish people are being screwed

The Irish people find themselves in a similar situation to the Icelanders. As an island state with a small population, Ireland was feted for its spectacular growth - as the Celtic Tiger - during the 1990's and the early part of this century. But that economic boom was built mainly on two things: undercutting corporate tax rates elsewhere in Europe; and an unsustainable property boom. Now the Irish, like the Icelanders, are mired in debt and austerity.

The first of those two - corporate tax breaks - was a classic example of globalisation - leading the race to the bottom - to the advantage of the corporations and at the expense of people in other nations. It's the stuff capitalist economists love. Let the market rip. Deregulate. Get countries competing with each other to offer to best bonanza to capitalists and sod the effect it has on the people and communities that suffer as a result. Privatise the gains and dump the costs onto taxpayers. At the moment Swiss cantons are luring away corporations based in the UK with promises of ever lower tax rates, and as our tax base shrinks we will become poorer as a greater and greater burden is placed on working taxpayers. Only the corporations and their shareholders benefit from this.

As for the unsustainable property boom - we have seen the effects of that here and in the USA - a global crisis not dissimilar to that which happened in the 1920s and 30s. In Ireland the banks recklessly lent eye-watering amounts of money, now the 4 million people of Ireland are picking up the bill - £15 billion in cuts to welfare and the public sector with more, much more, to come.

Property prices in Ireland (as here) are still falling, and as they do, the debts of the Irish banks continue to grow. Of course it's absolutely insane that the people of Ireland should be expected to bail out these banks. It's not their fault the banks went bust, and not one Irish banker has been held to account for what happened.

So why weren't these banks allowed to go bust? - as they should have been. Granted the ordinary depositors should have been protected but apart from that the rest of the debt should have been allowed to go hang. But wait a minute....... if that had happened not only would wealthy and powerful people lost their money but other banks in the UK, France and Germany would have lost money, and possibly been driven under as a result.

So the Irish, just like the Icelanders, are being made to pay for the failures of a capitalist system for which they bear no responsibility. Just as Ireland was bullied into a second referendum over the EU 'constitution' now it will be bullied into accepting another bailout by the EU so that european banks and investors will be protected. The Irish people have been screwed - but that is how capitalism works. Many years ago I went to a heated university debate about Ireland. One of the speakers said the Irish should get off their knees and fight. Never were those words more applicable than in Ireland today.

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