Archive for October, 2010

Nothing To Lose But Your Chanel

Guess who?

The middle classes could become a revolutionary class, taking the role envisaged for the proletariat by Marx. The globalization of labour markets and reducing levels of national welfare provision and employment could reduce peoples’ attachment to particular states. The growing gap between themselves and a small number of highly visible super-rich individuals might fuel disillusion with meritocracy, while the growing urban under-classes are likely to pose an increasing threat to social order and stability, as the burden of acquired debt and the failure of pension provision begins to bite. Faced by these twin challenges, the world’s middle-classes might unite, using access to knowledge, resources and skills to shape transnational processes in their own class interest.

The untrained eye might think a Marxist gobshite, but no. It’s the Development, Concepts and Doctrine Centre at the UK Ministry of Defence. The language about class is all a little confusing, and you would have to feel a little -just a little- for whoever had to write this up. I mean, how would you write about class interest without considering the class interest of the institution that has requested you to write up the analysis? Is the good old MoD the ultimate bastion of impartiality, just out to make sure that fair play and harmony reign? Is it Fergus.

Via.

Electric Vampires

Classic General Electric neon sign, in Willaco...
Image via Wikipedia

This is not what I should be writing at all, but my tragic fate entails getting a surge of energy to do something at the precise moment when I should really be doing something a lot more pressing. And yet there is an itch I need to scratch.

It relates to this story in the Irish Examiner yesterday.

“I just can’t cope with it any more,” she said, wiping her eyes. “It’s just that there’s so much stress and I can’t cope with it.
“I know it’s a horrible thing to leave my house,” she sobbed, as barristers shifted uncomfortably. The judge, commenting sympathetically, asked that they leave – they did in a matter of seconds, scattering like a herd of frightened zebra.

With her husband minding her son out in the corridor, the woman continued: “We have four children and I’ve explained it to them.
“My husband is trying to get work and we just can’t…”

The couple’s children are aged 13, 6, 4 and 18 months, and afterwards the father said the case, listed as involving GE Capital Woodchester Home Loans, had been hugely stressful for the family. He mentioned the phone calls from the lender, using the word “harassment”.

This is a scene that will be replayed again and again in coming years, unless there is a mass campaign to resist it.

Note the name of the firm conducting the harassment on the family.

GE Capital Woodchester is a subsidiary of General Electric.

When I started living in Dublin about 10 years ago and got my first job I went out for a few drinks on a Friday night in Thomas Read on Dame Street with a crowd of twentysomethings who were working in the IFSC, and, from what I could tell, making good money.

One of them, a fund manager who had been taking cocaine, started bending my ear with career advice, telling me grand tales about the head of General Electric and his great business wisdom. A book he had written had given him lots of lessons, many of which he shared with me but none of which I can recall.

It may not come as a surprise that the fund manager was a dick. Despite my failing to show any interest whatever in what he was saying, he made a point of handing me over his business card at the end of the night. He has always stuck in my mind as a model of wideboy asshole I’d never imagined I’d come across in Ireland but whose type, over the next decade, I’d end up encountering a lot more frequently than was healthy.

Some history on General Electric tells you a lot about the current predicament.

Before the global financial crash in 2008, referring to the Enron scandal, Michael Perelman had written the following:

Where does the blame lie? The criminal activity of some of the Enron executives and their abettors in the financial world is not surprising. A certain percentage of people will always cross the line when the opportunity presents itself. What is shocking is that the majority of the wrongs that Enron comitted were actually legal, largely because of the regulatory laxity achieved by the right-wing revolution. (Michael Perelman, The Confiscation of American Prosperity: From Right-Wing Extremism and Economic Ideology to the Next Great Depression)

The right-wing revolution, Perelman writes, was down to a small group of business interests ‘carefully engineering a conservative takeover of the main organs of power in the United States beginning in the 1970s’. A ‘combination of well-financed think tanks, racist demagoguery, and sophisticated political maneuvering’ rolled back many of the progressive advances of the 1960s and set in motion ‘the destructive forces’ that presently beset the US economy. No force was more important than financialisation:

In reality, unregulated financialization works like a drug-induced euphoria. A get-rich-quick mentality spreads throughout the economy. Solid wealth-producing activities quickly lose their attraction. Recall the billion dollar incomes of hedge-fund managers.

There was no question, in Perelman’s mind, about what was needed:

The need for stricter financial regulations is more urgent than ever. Since 1970, the ratio of total financial assets to GDP has more than doubled. By the end of June 2004, the Bank for International Settlements estimated that the world financial market had $200 trillion worth of outstanding derivative contracts, or more than $35,000 for every single person on the face of the earth

While the relative size of the financial sector has ballooned, the manufacturing sector has shrunk. For example, the share of manufacturing represented 21.2% of GDP in 1974; by 2004, that figure had fallen to 12.1%. In contrast, the Finance, Insurance and Real Estate sector rose during the same period from 14.9% to 20.6%, effectively trading places with the manufacturing sector.

But that doesn’t tell the full story, and here’s where GE Capital Woodchester come in.

(These) data fail to reflect the full extent of the shift from manufacturing to finance because nonfinancial companies often earn substantial profits from financial operations, without reporting separate information for their financial operations. The magnitudes in question can be substantial. For example by 2005, General Motors and Ford earned almost all their profits from their financial operations rather than from producing cars. For General Electric, financial operations produced almost half of the company’s profit.

I’m getting to the age now where I forget what I was thinking a couple of years back. I look back and it feels like I was floating in some sort of narcosis. When I was hearing about the General Motors bailout, did I think that it had mostly to do with crap cars that didn’t sell? Is that what others thought?

But back to General Electric. Jack Welch, the fund manager’s hero, is supposed to have coined the term ‘shareholder value’ in a speech in 1981.

Ha-Joon Chang’s 23 Things They Don’t Tell You About Capitalism describes what followed:

Soon after Welch’s speech, shareholder value maximization became the zeitgeist of the American corporate world. In the beginning, it seemed to work really well for both the managers and the shareholders. The share of profits in national income, which had shown a downward trend since the 1960s, sharply rose in the mid 1980s and has shown an upward trend since then. And the shareholders got a higher share of that profit as dividends, while seeing the value of their shares rise. Distributed profits as a share of US corporate profit stood at 35-35 per cent between the 1950s and the 1970s, but has been on an upward trend since the late 70s and now stands at around 60 per cent. The managers saw their compensation rising through the roof, but shareholders stopped questioning their pay packages, as they were happy with ever-rising share prices and dividends. The practice soon spread to other countries – more easily to countries like Britain, which had a corporate power structure and managerial culture similar to those of the US..

Now, this unholy alliance between the professional managers and the shareholders was all financed by squeezing the other stakeholders in the company (which is why it has spread much more slowly to other rich countries where the other stakeholders have greater relative strength). Jobs were ruthlessly cut, many workers were fired and re-hired as non-unionized labour with lower wages and fewer benefits, and wage increases were suppressed (often by relocating to or outsourcing from low-wage countries, such as China and India – or the threat to do so). The suppliers, and their workers, were also squeezed by continued cuts in procurement prices, while the government was pressured into lowering corporate tax rates and/or providing more subsidies, with the help of the threat of relocating to countries with lower corporate tax rates and/or higher business subsidies.

We can see Ireland’s supposed golden goose of low corporation tax as partly the product of this unholy alliance. But there are other consequences.

The intense media focus on exorbitant salaries of politicians and top government officials tends to blot out the fact that these pay levels were established via a process of benchmarking intended to confer some degree of parity with top managers in the private sector. But since top managers in the private sector were, as Chang points out, the beneficiaries of an unholy alliance with shareholders that allowed them to swell their own pay packets, this was a remarkably sweet deal for top politicians and government officials, given that the task of providing public services is antithetical to meeting the goal of delivering shareholder value.

This is worth bearing in mind when you hear calls, such as the one made in the Irish Times yesterday -an egregious example, given the implicit call for fascist rule- for the state to be run like a private sector corporation: the Ireland Inc wet dream of the anguished petty bourgeois imagination:

Breathing new life into civil morality – The Irish Times – Wed, Oct 20, 2010

Should we sit and wait to see if a saviour emerges from within our political system or should we take the necessary steps to fix the problem in a more creative manner? Asking our elected representatives to vote for the type of significant changes necessary to fix the issues of confidence, lack of trust and general apathy caused by decades of clientelism and corrupt practice would be a huge stretch. Instead we ought to demand our Government and all Opposition parties come together, agree to dissolve the Dáil and as a last action appoint qualified private sector specialists to run the various departments as a business.

We could have the cream of our business community thus running the country and guiding us through the difficulties we surely face for the next several years. – Yours, etc,

PETER B MacNAMARA,

Buhlmattweg,

Fahrwangen,

Switzerland.

If the state were run in this way, top politicians and officials -sorry, duces and gauleiters- would be paid more, not less. Public sector worker wages would be driven down, but the cost to the citizen of obtaining the service would be driven upward. Because that is the way these entities operate.

If government officials bid bankers and builders full steam ahead with their catastrophic housing bubble, drawing the working population into massive debt through the lure of cheap credit and the fear of never being able to buy a home, it was not least because people who had raised themselves aloft on profits gleaned from slashing workforces, asset-stripping and outsourcing were telling them they were worth it, and they should play along.

Back to Jack Welch’s General Electric, the company that ended up making its profits not from electricity, but from financial operations. Back in 2001, Ireland had a critical, now retired admirer:

BW Online | December 19, 2001 | Jack Welch: “The Opportunities Are Enormous”

And I hope everyone in this room believes as I believe that globalization is in fact the only game in town that will give the have-nots what the haves have…. Ireland is the best example. Go to Ireland today and see a booming economy that came because jobs came from the U.S. Jobs came from Europe to make Ireland a greater place.

MIAMI - JANUARY 16:  Jack Welch, President, Ja...

Image by Getty Images via @daylife

The Irish are worried now because Gateway announced they’re moving a plant to India and they’re saying, “What do we do

now? Globalization is killing us.” They’ve just been benefiting for 20 years from globalization but now they’re concerned that Gateway is moving to India. They have to move up the food chain just the way we have here. As we’ve lost jobs in one industry after another, the low value-added jobs, we created the lowest unemployment we’ve had in our country in the ’90s. So it works. India. China. Eastern Europe. Go to Prague, Warsaw, or Budapest. They are different cities than they

were.

It works all right. For the likes of Jack Welch. In the cold light of a country on the verge of the abyss as a consequence of financialisation, Welch’s words are an effective emetic. Get-sick-quick.

And yet, whilst many people, like the family in Cork, are sinking helplessly, General Electric sustains itself through massive state support.

The Washington Post wrote in 2009:

Loophole Helps GE Benefit From Bank Rescue Program – washingtonpost.com

General Electric, the world’s largest industrial company, has quietly become the biggest beneficiary of one of the government’s key rescue programs for banks.

At the same time, GE has avoided many of the restrictions facing other financial giants getting help from the government.

The company did not initially qualify for the program, under which the government sought to unfreeze credit markets by guaranteeing debt sold by banking firms. But regulators soon loosened the eligibility requirements, in part because of behind-the-scenes appeals from GE.

As a result, GE has joined major banks collectively saving billions of dollars by raising money for their operations at lower interest rates. Public records show that GE Capital, the company’s massive financing arm, has issued nearly a quarter of the $340 billion in debt backed by the program, which is known as the Temporary Liquidity Guarantee Program, or TLGP. The government’s actions have been “powerful and helpful” to the company, GE chief executive Jeffrey Immelt acknowledged in December.

GE’s finance arm is not classified as a bank. Rather, it worked its way into the rescue program by owning two relatively small Utah banking institutions, illustrating how the loopholes in the U.S. regulatory system are manifest in the government’s historic intervention in the financial crisis.

….

GE’s ability to live in the best of both worlds — capitalizing on the federal safety net while avoiding more rigorous regulation — existed well before last year’s crisis, because of its unusual corporate structure.

Banking companies are regulated by the Federal Reserve and not allowed to engage in commerce, but federal law has allowed a small number of commercial companies to engage in banking under the lighter hand of the Office of Thrift Supervision. GE falls in the latter group because of its ownership of a Utah savings and loan.

David Harvey writes in The Enigma of Capital:

The credit system has now become..the major modern lever for the extraction of wealth by finance capital from the rest of the population. All manner of predatory practices as well as legal (usurious interest rates on credit cards, foreclosures on businesses by the denial of liquidity at key moments, and the like) can be used to pursue tactics of dispossession that advantage the already rich and powerful. The wave of financialisation that occurred after the mid-1970s has been spectacular for its predatory style. Stock promotions and market manipulations; Ponzi schemes and corporate fraud; asset stripping through mergers and acquisitions; the promotion of levels of debt incumbency that reduce whole populations, even in the advanced capitalist countries, to debt peonage; dispossession of assets (the raiding of pension funds and their decimation by stock and corporate collapses) – all these features are central to what contemporary capitalism is all about.

We could add to this list the pursuit of families into destitution and desperation, even when these families are the victims of the destruction of economies wrought by institutions such as GE, who suck the life out Peter so that they can turn round and suck the life out of Paul, and they do so with the support of ruling elites, who suck up to the likes of Jack Welch, even if the country they live in crumbles into dust.

A Brief History of Very Rich People

Couple of things to red up before I call it a day.

In the comments section of a previous post, Fergus O’Rourke pulls me up on my use of the term ‘Very Rich People Benefit’ as another word for bank bailouts. So here it is. CMK has already answered this very well. But seeing as I had started to write a response, I might as well finish it. Fergus asks me to name names. When I don’t, and point him in the direction of a book, he says he doesn’t want to read it, because it wouldn’t provide an answer.

Oh well. Harvey’s ‘Brief History of Neoliberalism‘ tells you how the typical Neoliberal State -with which Ireland shares many important common features – has a manifest bias toward a drive to restore class power:

In the event of a conflict, the typical neoliberal state will tend to side with a good business climate as opposed to either the collective rights (and quality of life) of labour or the capacity of the environment to regenerate itself. The second arena of bias arises because, in the event of a conflict, neoliberal states typically favour the integrity of the financial system and the solvency of financial institutions over the well-being of the population or environmental concerns.

Though there may be a conflict with neoliberal orthodoxy, neoliberal states

typically facilitate the diffusion of influence of financial institutions through deregulation, but then they also all too often guarantee the integrity and solvency of financial institutions at no matter what cost. This commitment in part derives (legitimately in some versions of neo-liberal theory) from reliance upon monetarism as the basis of state policy- the integrity and soundness of money is a central pinion of that policy. But this paradoxically means that the neoliberal state cannot tolerate any massive financial defaults even when it is the financial institutions that have made the bad decisions.

In this description, we see two prongs of state policy currently governing the Irish population. One, the all-out commitment to keeping financial institutions afloat even as ordinary people sink. Two, the reliance on, or rather, in the Irish case, the subjection to, monetarism.

The Irish population has no control over the ECB, whose main task is the control of inflation in the Eurozone. It is this institution that primarily determines the amount and cost of money available for lending to Ireland.

Since the Irish State doesn’t print its own money, its potential options for spending to counter the effects of the burst housing bubble are severely constrained. The ECB could extend greater levels of support to Ireland, basically by printing more money, but it does not. Instead, Ireland must make promises that it will hit the Stability and Growth Pact target of 3pc of GDP by 2014.

The effects of this on the general population will be severe, with proposed cuts in public services and social welfare, accompanied by higher tax burdens, due to tighten the vice on the worst-off.

While the outlook for the public is extremely bleak, with large swathes likely to encounter increased instability and a shrinking social wage, it is not true that there will be no stability and growth in Ireland.

For instance, Corporation Tax, according to current plans, will remain stable. This means, in effect, an increased subsidy to corporations.

“So if Ireland decides it wants to keep a low corporation tax, it has to deal with the deficit in some other way and we will be saying: ‘Okay, that’s your choice. If you don’t deal with it that way, how are you going to do it?’”

There is a widespread belief that a Corporation Tax rate of 12.5% is the golden goose that must not be molested lest it drop dead. Raise Corporation Tax, the theory goes, and watch all those MNCs bolt for the exit door. This theory shows the degree of power enjoyed by corporations in Ireland.

When ordinary people have to pay more taxes in order to make sure that corporations are held only to their present obligations, this is a shift in power away from the population in the direction of private corporations.

This benefits some very rich people. Take, for instance, someone resembling the CEO of a multinational. Like Mark Hurd. Mark Hurd was appointed chief executive of Hewlett-Packard, a company that employs a lot of people in Ireland, in 2005. On appointment, he was given $20 million as a ‘Golden Hello’. He then proceeded to sack thousands of people. He was ‘beloved by investors for his relentless cost-cutting – and scorned by thousands of laid-off employees for the same’

Hurd received $37 million when he left HP, after the firm found he had falsified expense reports and other financial documents to conceal his relationship with a woman who had brought a sexual harrassment case against him.

Not all CEOs hang out in secret with actresses who starred in Body of Evidence 2, but many do get paid lots of money to drive down wages, sack lots of people and seek to relocate operations to cheaper locations in order to maximise shareholder value. The benefits to them of maintaining corporation tax at its existing level whilst the general population endures unemployment, wage cuts, benefit cuts, and crumbling public services are transparently obvious.

OK. That is one group of very rich people who benefit from the bank bailout. Who else? Fergus asks for a good reason why people like Micks O’Leary and Smurfit personally benefit from the rescue of the banks: the degree of social power they enjoy relative to the general population increases as ordinary people are hit with effective wage cuts. Threats of disinvestment enable them to exert more control over government for concessions.

In this light, we can see why Goldman Sachs Chairman Peter Sutherland might see fit to call for the sell-off of RTE, as he did last week. For all RTE’s faults, and some of its news and current affairs programmes are atrocious, its existence serves to maintain a certain standard of quality in news and current affairs reporting. Were it sold off to private corporations, the quality of information readily available to the general population would fall, since information would be presented and communicated primarily for the purposes of making a profit, rather than providing a public service. This would mean even less scrutiny for private corporations, leaving these with a free hand to fuel public disenchantment with the institutions of government, so that the public might see government, and not the concentration of private power, as the primary cause of the disintegration of prosperity.

So, in general, as a result of the bank bailout, capitalist producers are conferred with a greater coercive power over the workers they hire. They are in a better position to exploit workers more exhaustively, and deprive them of the necessary information to become conscious of their predicament.

Hope that answers the question.

=================================================================================

Moving on, I want to consider what it means to say things like ‘Very Rich People Benefit’, and what the likely consequences are of doing so. Saying something like this can seem controversial because we are not used to hearing it put in these terms. Public political debate tends to require that words be freighted with moderation and circumspection. In such circumstances, saying things like ‘Very Rich People Benefit’ as inflationary.

Presenting a debate in ’emotive’ terms is automatically frowned upon. There are unspoken rules which hold that the use of controversial language automatically disqualifies you from holding a legitimate point of view.

Furthermore, if you use ’emotive’ language, this may convey to others, even those who might be sympathetic to what you have to say, a sense of your lack of authority relative to those who deploy neutral language can come across. So saying things like ‘Very Rich People Benefit’ always carries the risk that people will just switch off because they think that what you are saying must be wrong because when people are right they speak differently to that. But seemingly neutral and objective language covers up all sorts of ugly realities, so there is a case to be made for being inflationary on occasion. Let me give an example, which relates to the matter of the bank bailouts.

An important component of the bank bailouts in Ireland is NAMA. for a process that, in the case of Ireland, amounts to what forty-six academic economists last year called -conservatively, in my view- ‘a massive transfer of wealth from taxpayers to private risk-takers‘.

I say ‘conservatively’ because the use of the term ‘taxpayer’ says nothing about who will be worst hit as a consequence of that transfer of wealth. Michael O’Leary is a taxpayer, as far as I know, but he would not be hit by this transfer of wealth in the same way as, for instance, a construction worker who lost his job when the bubble burst.

Also ‘private risk-taker’ doesn’t tell us a great deal about the type of person who might fall under that category. There are very few people who don’t take private risks. If a person on average industrial wage, confronted with news of ever-upward spiralling house prices in the press, decides to take out a mortgage in the expectation that it will only be even more expensive to take out a mortgage in future, that person is a private risk-taker.

There are more extreme examples. If the same person, a few years later, having lost his job, takes out a payday loan in order to pay the electricity and gas bills, he acts once again as a private risk-taker.

In both examples supplied, we can debate how willingly these risks are taken. But there are other situations in which risk is simply thrust upon people: being compelled to do more work for less pay on threat of losing your job, having to shoulder a greater burden because other staff have been fired, or simply getting fired yourself, increases your risk of ill health and an early death.

It seems safe to assume that the type of private risk-takers mentioned above are not the kind of people the cited economists mean when they talk about the beneficiaries of the massive transfer of wealth.

I note these problems with the language used by the economists in their letter because it’s a good example of how, when it comes to economics, what appears on the surface as the language of empirical inquiry, turns out, on closer inspection, to be the product of moral judgement.

While there is doubtless a degree of ideological diversity among the signatories, and not all might have used the opposition between ‘taxpayer’ and ‘private risk-taker’ if left to their own devices, the final outcome is the product some sort of consensus-seeking activity, based on an expectation of how their words are going to be received, and perhaps how they are going to be perceived as a result. This is not to say that these people are wrong to sign a letter worded in such a way: signing it may be a good thing to do when considered pragmatically.

It just shows that when it comes to speaking, the realm of public debate can impose a hefty admission fee.

There Are No Atheists In Coffins

Good Friday, everyone. I am very short of time today and I really shouldn’t be doing this, but I felt that since I accurately predicted what was going to be the content of David Quinn’s Friday column a couple of days back, I ought to mark the occasion in some way. So here is an excerpt from his column today.

David Quinn: Why there were no atheists in the mine – Analysis, Opinion – Independent.ie

But research shows that, on average, it is better in these situations to have a religious faith and it is completely natural to think of God and to pray in such circumstances because religion is a natural and ineradicable part of human nature.

The story of the Chilean miners proves this yet again. Faith is what helped many of these men to cope with their ordeal. The old adage says, ‘no atheists in foxholes’.

Now we know there are no atheists in collapsed mines either.

Nice, huh? Now, not only are there no atheists in foxholes, or mines, there are some countries where the State can end up seeing to it that there are no atheists in coffins either. Below is a very quick translation of a nice article by Daniel Ayllón in Público that appeared today. There is a bit of religious wordplay in the original that I’m not equipped to replicate, so you’ll just have to suck up the loss, I’m afraid.

Communist’s wake goes the Way of The Cross

“Holding a funeral without religious symbols in Spain is a Calvary.” Camelia Casas buried her grandmother, Teresa Morán Tudó, who died in A Coruña aged 99, last 21st September, after coming up against a rosary of events in which “the Catholic cross was present in every moment.” And it happened despite the insistence of the family on holding a ceremony in keeping with the beliefs that Granny Tere defended all her life: “She was an atheist, an activist, a fighter, a member of the Spanish Communist Party (PCE) and a militant since 1931, when she entered the Communist Youth”, they recall. But her funeral was plagued by crosses: on the death notice, in the funeral home, and on her coffin.

When the family entered the tomb in the M-40 funeral home in Madrid, a large polished wooden cross a metre and a half high overlooked Tere’s room. “We put it there by default, because 95% of the time the burial follows the Catholic rite”, a spokesperson for the firm that runs the centre claimed days later.

“The problem is that we live in a society in which it is taken for granted that we are all Catholics. But, is it so difficult to ask if we want religious symbols?” complained Camelia, citing article 16 of the Spanish Constitution: “No religious faith will be associated with the state”

Tere’s son had already made clear to their Galician funeral firm that they did not want the presence of religious symbols. “If the firm doesn’t tell us, we don’t find out until the family arrives”, the spokesman for the funeral home said. Once noticed, the large crucifix erected in the room was removed immediately. As was the sheet, covering the trolley under the coffin, which had a shiny golden cross sewn onto black velvet.

To top it all, the coffin lid was crowned with a figure of Christ. “We asked them to take it off, but it was complicated”, recalls Camelia. The figure could be removed by a screwdriver, but the crucifix was firmly stuck to the lid. “We can’t take off the lid because it’s fastened to the coffin. If we tear it off, we don’t know the consequences”, warned a manager from the firm. But Tere’s wishes won out. The coffin was not damaged, but a mark from the varnish remained.

Before dying, the woman left two clear wishes: that the flag with the logo of the PCE cover her coffin and that it be accompanied by a wreath of flowers from her party comrades.

Despite her militancy, Tere stayed in Spain for the entire duration of the dictatorship. In 1945, she was arrested for helping PCE comrades on the run. After completing a punishment of four years in prison, she took refuge among her family, to whom she narrated a thousand and one times how she would pretend to faint in order to not have to attend Mass in prison, which was obligatory in the decade of the 40s. “And in the same way that the priests walked in front of the firing squads with a crucifix so that the condemned would kiss it, they did the same in the prison. But she and other women prisoners rebelled”, says Camelia.

They found the last religious stumbling block in the death notice that was published the same day of her death in the El País newspaper. Despite not being a conservative paper and despite the insistence of her family, the death notice appeared with a cross drawn on it. The paper said the firm that prints the death notices was responsible, but two days after it published a note of apology and a new notice, finally, without a crucifix.

The paper publishes a photo of Tere visiting Karl Marx’s grave:

Nice weekend to all.

Child Benefit For All – Including Dupes and The Very Rich

Irish Times – Polls – News Poll

Do you believe child benefit payments should be abolished for higher earners?

A word on universal provision of Child Benefit, seeing as the Tories decided they’d get rid of it yesterday, and the usual kites are being flown with a view to replicating the measure here.

Lots of apparently well-meaning people say “well, there are some people who get it and they really don’t need it”, and in doing so justify the decision to pay Child Benefit only to those parents whose incomes do not exceed a certain threshold.

Some of these people are dupes, and others are just saying it for their own advantage. But I am writing this for the dupes. These are the ones who can’t see that child benefit is paid for out of the total amount of money raised by the government, and not out of some Child Benefit piggy bank that wings its way down from heaven.

So when you talk about whether or not you should cut Child Benefit, you should consider it in terms of overall government priorities. A decision to restrict child benefit should, for starters, be weighed against what is going to be spent in other areas.

For instance, if your government decided to spend €50 billion on what is euphemistically termed ‘bailing out banks’ but can also be called ‘Very Rich People Benefits’, you may wish to pause for a moment and consider whether this makes sense. Stop and ask yourself: should we cut Child Benefit because it is more important to pay Very Rich People Benefit?

Then there are the others who say these things because it is to their advantage, the managerial strategists. Normally these people have already made up their minds to pay out Very Rich People Benefit in spades. And this leaves them in a good position to move the conversation away from the question of just what the dickens Child Benefit is for anyway. So now is a good time to issue a reminder.

The Department of Social Protection, not especially renowned for its protection of Society, says this about Child Benefit: ‘Child Benefit is a monthly payment for each qualified child normally living with you and being supported by you.’ The ‘qualified’ modifier has nothing to do with Junior Cert results or an ability to run the 800m in four minutes. It has to do, mostly, with whether or not said child, or that child’s parents, were born in the right place. I mention this in passing because I should be really addressing the matter of universality now, but Child Benefit in Ireland is not a universal benefit.

But let’s say it was. Suppose Child Benefit in Ireland really were a universal payment. What would be good about this? Let me give one reason. It is a basic moral statement by society that every child is equal. That is, it doesn’t matter who your parents are, or what they do: society considers that you need to be looked after (you are, after all, a child), and that takes money, and so we’re providing this money to your parents and we trust them to use it properly on your behalf.

The problem I suppose, with moral statements, is that lots of people think that morality, particularly in Ireland, is mostly to do with who you’re sleeping with and whether or not you are allowed to brush your teeth before communion, and has little to do with how people treat one another in the round. It might seem strange to some, then, that I should be talking about them in arguing for universal payment of Child Benefit. So let me give an example of what I am talking about.

Last night there was a programme on RTE, where Joe Duffy was presenting the case for recognising James Connolly as Ireland’s Greatest. Greatest what, I am not clear. And despite my own reservations, by Joe Duffy’s standards I have to say it was very good indeed. There was one part, however, that jarred. He went to meet his friend, Harry Crosbie, who was perched somewhere high, overlooking one of his monstrosities. And Crosbie said a couple of things against James Connolly’s view of the world.

At the outset, he claimed that Connolly was wrong because capitalism reflected human nature. In short, human nature is red in tooth and claw, everyone is out to advance their own self-interest, and it is natural that the strong dominate. The wealth must be created before it is redistributed. Those at the bottom -the weak- should then rely on the protection of the strong, and wait for the wealth to trickle down. As a condensed version of what the most wealthy and powerful people think, it was not bad. And then Joe Duffy says to him, but what about innate human decency? And Harry Crosbie said, well yes, I agree with there being innate human decency.

If Crosbie had a view on how a belief in innate human decency and belief in a natural drive to dominate others could be reconciled, it didn’t come across in the programme. As it happens, I categorically reject the proposition that people are innately decent. And I also reject the proposition that people are innately wicked. Babies have no sense of decency at all. And yet they do not harbour ambitions to invade Poland either. Decency in people, or lack of it, develops through custom, habit, practice, teaching, and example. To say all people are innately decent is like saying all people are innate virtuoso trumpeters. It makes far more sense to say that people have the capacity to be decent, and this capacity can be developed, neglected, or extinguished, depending on what happens.

Hence Universal Child Benefit as moral statement. For the State to treat all children equally in this regard is to say something important about childhood -and also the work of parenting. It recognises that the welfare of children is not just the responsibility of the parents, but of everyone. It provides a foundation for how people should act toward one another. Obviously, it should not be the sole foundation: there are other things, to Ireland’s disgrace, which are also lacking, like a National Health Service.

By saying Universal Child Benefit is a moral statement, I’m not saying that it is a grand collective proclamation. I say it in the sense that all economic arrangements are moral statements, in that they say something about how people ought to relate to each other. These statements are, of course, interpreted by different people in different ways, depending on where they stand. And this being the case, I need to look at what it would say to move away from universality toward a situation where children have to meet additional criteria -beyond those of nationality- for their parents to receive this benefit.

So what would it say? It would say, first of all, that other people’s children should not be our responsibility. We should not have to care about them.

This may not be explicit, because the way the change would be proposed -that the rich don’t need the money, whereas the poor do- implies a collective concern with looking out for the most vulnerable.

But behind the implied concern lies a more blunt position: there are some people (the haves) who are able to provide their children with what they need, and there others who can’t (the have-nots). So if only everybody could be like the rich, and were able to look after their children, we wouldn’t have to be concerned with other people’s children. This, as it happens, is Harry Crosbie’s position. Nature is red in tooth and claw, the strong are at the top because they are innately strong, and the weak are at the bottom because they are innately weak. But despite this, on account of a streak of innate human decency, the strong will not devour the weak entirely, and will step in, albeit reluctantly, to make sure that those weak people who can’t look after their children are supported in their attempts to do so.

That’s what the moral statement would say in a general sense. We would also need to look at how people in different situations would interpret them. First, to receive Child Benefit, a parent on a low income will have to continually demonstrate to the state bureaucracy that he or she is incapable of looking after his or her child to the full, whereas previously this money was received because he or she was simply the parent, and this entailed certain responsibilities. For the parent, it’s both a humiliation and the application of a stigma, with repercussions for the child. Second, a parent slightly above the income threshold -but by no means comfortable, and struggling to pay bills- will resent the payment of Child Benefit to people who -applying the Harry Crosbie criteria- receive it because they are weak. Third, a person who doesn’t have any children will conclude that there’s no reason whatsoever why he should be paying for the shortcomings of other people in having children when they are clearly incapable of looking after them.

Cloaked in egalitarian language, the calls for the removal of what passes for universality in the provision of Child Benefit are nothing more than a lit stick of dynamite, directed at whatever vestiges of social solidarity still exist. If it sticks in your craw that the rich should benefit at the expense of the poor, you would do much better to turn your view back to the matter of the Very Rich People Benefit. For the majority of the population in Ireland, calling for an end to what universality there is is like demanding that the man with the knife shouldn’t leave a mess on your bathroom floor, while at that very moment he’s making off with your kidney.

Up

David offered up the sacrifice to his stockbroker ancestors.

Wake Up

Ireland’s apathy | Mary Fitzgerald | Comment is free | guardian.co.uk

There is something in this, but it’s only a partial explanation. This is a country, remember, that also underwent dramatic social liberalisation during the last two decades, and the Catholic church, rocked by abuse scandals and subsequent botched cover-ups, commands a fraction of the moral authority it once did. While the guilt of repentant Catholics may be a factor here, it does not fully explain the apathy with which the cuts have been met.

Much of the answer, I believe, lies in how Ireland’s dramatic social and economic transformation over the last 20 years changed the broader national psyche. Consider that Ireland went into the 1990s as one of the poorest, most underdeveloped countries in Europe – and emerged one of the richest. For so long used to being the poor cousin to Britain, its wealthier, more powerful neighbour, suddenly Ireland was a player on the global scene – and this bred a new sense of national confidence. Equally, though, because patriotic pride was so intimately linked to economic success, the sudden downturn was felt, keenly, in terms of collective shame and chastisement – and a fear of a return to the “bad old days”. It may be this fear, above all else, which accounts for the muted response to the regime’s disastrous policy choices.

I read a claim recently to the effect that it’s only a short dash between psycho-history and psycho history. We might say something similar about the sort of national psychologising on display here.

Lots of people -myself included- get drawn toward these intricate cultural explanations as to why Irish people are not launching RPGs at the IFSC. In the end, it doesn’t matter a shite. It shouldn’t be a matter of why meekness and outright capitulation is the order of the day, but how best to win people over to the idea that they would be better off taking to the streets. As they say, we are where we are.

Trying to work out some all-encompassing account as to why Irish people are this way is a waste of time. As a secondary effect it invites the idea that the people living on this island are all bound together in this, when they aren’t.

A former attorney general gorging on a fat EU pension while sitting on the board of one of the institutions trading in Irish bonds who calls for austerity is not in the same boat as an unemployed couple living on the outskirts of Cavan town. The managing director of an investment firm who sits on An Bord Snip Nua and calls for 30,000 public sector jobs to be cut is not in the same boat as a psychiatric patient whose treatment facility is about to be closed. A radio presenter who is paid hundreds of thousands of Euro each year and claims ‘we are all terrified’ of the upcoming budget is not in the same boat as a family living on benefits who claim ‘we are all terrified’ of the upcoming budget.

Sure, fear is a big factor. Fear of getting laid off, of sinking further into the mire, of losing pride, and so on. But in the end, the only important thing to be said about that fear is that there are plenty of people with a vested interest in stoking it. Take a look around, and ask yourself who benefits from demands that you don’t speak out, that you remain a good little doggie and that you take your medicine. For starters, you can be pretty sure that the person making the demand gets something out of it, whether in the form of money, power, prestige, or as a consolation for their own underlying sense of powerlessness. Get rid of the fear, and you get rid of an important part of the power they have over you.

Even if you could elaborate some winning tale about a common congenital complaint that establishes the precise reason as to why there is not much resistance (though there is some), who cares? People can change very quickly. And even if we see that precariousness is rocketing, that the calls for ‘austerity’ are cowing people into submission, that hardly absolves you of the obligation to do something about it. And even if the 50 billion for banks and the accompanying budget cuts seem like faits accomplis -one element of yesterday’s presentation was in order to shock the population into seeing them as such-, there is no good reason in the world why people should refrain from struggling against them, even if it turned out that the sum total of their efforts only brought it down to 49.9 billion. That’s 100 million euro, right there. Don’t let people tell you it isn’t worth it.

Anyway, have a nice weekend, and listen to this:

Vodpod videos no longer available.


I on Twitter

October 2010
M T W T F S S
« Sep   Nov »
 123
45678910
11121314151617
18192021222324
25262728293031