Sunday, 6 March 2011

A new programme for a new society?

Slí Eile: In the coming days there will be considerable debate and analysis of the content of the Programme for Government agreed by Fine Gael and Labour. Consideration of the major issues involved and the posing of some difficult questions are needed. In particular:
Give or take a billion here and there and give or take a year or two in timing - will it be possible to operate within the broad parameters of the EU/IMF deflationary plan as already agreed and carried forward in the new Programme?
If social welfare rates are maintained as indicated in the Programme AND pay rates in the public sector are kept intact under the Croke Park Agreement AND'frontline' services in education and health are maintained - what is left to cut within the aim of cutting spending by 6 billion over the next five years or so?
Will the cuts to spending and increases in taxes be 'gross' or 'net'? For every cut of €1bn in public spending at least €0.3bn is directly lost in taxes and other social receipts and, in addition, an unknown amount is lost indirectly through falling incomes and domestic demand. So, to achieve a net fiscal adjustment of say €9bn over 5 years would require a much larger 'gross' adjustment - two thirds of which is agreed will come from spending?
but what spending? All the big areas have been cut to the bone and in some cases health services on are on the point of collapse. It is true that there are areas - even still - of public spending waste. However, rather than continuing to cut these Government should be increasing spending and restoring social welfare cuts already made in order to arrest the decline in income and demand.
What if the slump continues, oil prices rocket, exports stall and the Eurozone goes into a new crisis? What is plan B?
More to the point - does the Programme represent the best that can be achieved at this time in ameliorating the impact of the slump on the poor and the exclude and does it provide the best possible way forward in realising a society based on equality and democracy?
Honestly can we say yes to this question while operating within the broad parameters of the markets, the EU and the IMF?
Next week will be the same as last week - for at least five key issues confront most individuals, families and communities in Ireland today:
* Paid work in the labour market
* Unpaid caring work
* Debts - personal, corporate and societal
* Homes - places where people live and are nurtured
* Health and well-being
These issues boil down to two core issues - human dignity and human solidarity.
In the current political and economic crisis which afflicts Ireland since 2008 and whose roots go back over many years the following three sets of policies are being pursued with deadly impact on jobs, homes, debt:
* Further reductions in the share of national income going to labour (dressed up as improving competitiveness).
* A smaller State (we have all heard the talk about 'big government', 'quangos', 'bloated public service' and 'welfare dependency')
* A bailout by the many small lenders for the big creditors solemnised at the faustian marriage of sovereign and private (now socialised) banking debt.
Is the new programme a continuation of this? is it the only possible game in town?
A response to this unprecedented assault on the public services and living standards of most citizens requires a robust, timely and realistic consensus among the 'broad left' centered on a new Five Point Plan
1. Privitise the debt and no socialism please for large corporate interests! - with a massive reduction in the share of public expenditure and liabilities going towards corporate private debt (if that means part default, part re-schedule, part debt-equity swap then so be it).
2. Hold the level of other government consumption spending and increase the level of capital funding in a targeted way to generate economic recovery and employment growth using greener technology and patterns of consumption
3. Address the fiscal deficit in an orderly, timely and proportionate way by:
a. Growing the economy over a period of time
b. Cutting public expenditure on bank bailouts and redirecting spending into jobs, green technology and revenue-raising activities
c. Raising taxes on high-income and high-wealth individuals
d. Generating additional tax revenue by getting more people back to work
4. Reform the management and organisation of public services together with political institutions allied to stronger stakeholder governance in the private sector
5. Abolish poverty - especially child poverty - by means of a combination of tax/welfare changes to ensure that everyone can live and work (whether paid or not) on at least a basic minimum wage consistent with human dignity and solidarity.

More comments over the coming days. In the meantime as people work their way through the document comments, observations are welcome.

1 comment:

Martin O'Dea said...

My evening this evening consisted of watching the movie Shutter Island, while reading emails and seeing more work from David McWilliam's site and then watching the Week in Politics. The thought struck me that the whole thing is a set up on McWilliams, in fact, he is insane and those of us that agree with his intentions are also insane or, at least, misled.

The non-partisan and Nobel winning American economists who think that we are walking the plank - are a little more difficult to explain away; on less there in on it to.

The thing to do is to look at the opportunities that as I have argued abound, appreciate that all citizens are one and another and so are entitled to all of the opportunities and assistance that the state (which is the citizenry organised) in a wholly equal manner. Lay the foundations for a society of freedom and cooperation and one where creativity and innovation are preeminent.
Having done all of this decide upon sources of finance to fund these endeavours. Seriously it is with this attitude, where the finance enables and is not mistakenly seen as the goal or the driver, that society succeeds. One of those American economists Krugman has explored this idea of honesty and clarity of objective being core ideas in economics; and that the instincts to exaggerate, hide, lie in business over a given period of time are the architects of their own fall.
In all honesty, having readied ourselves in this manner, I would suggest taking a flight in a clear day when you can be seen from the ground in Brussels to Beijing, and ask them how they are managing with finding returns on such a vast surplus, and how much they would like an E.U. partner with technical R&D based skills to help in the rapid movement of China up he value added stream. Perhaps our E.U. colleagues would find a new interest in our circumstances, perhaps not. In any event Ireland has to reject the broad attempt to take opportunity away from at least a generation