Politics

Random entry RSS

  • Posted in:

    What 200 years distance from Offaly can do for a man

    Comparing Obama to Cowen is probably unfair but Cowen could at least learn from him the benefits of a Vision By Michael Smith Brian Cowen and Barack Obama have an extraordinary amount in common.  Both are in their late forties, both are lawyers educated at elite law schools, both are articulate – much more articulate than their predecessors, both have two young daughters and beautiful wives.  They lead the two English-speaking countries with the highest average incomes. And both come originally from, um, Offaly.  But there the parallels divide. Mostly they are different, as different as it is possible to imagine two heads of government. It is unfortunate for Ireland (though not for the world)  that the contrasts are all to Cowen’s disadvantage. Many of the extraordinary characteristics of Obama are rooted in the culture and politics of the US and his place in them.  There is no way Ireland could have generated Obama. Let’s have a look at the forces that make these men what they are and see if there is  anything at all that our man can learn. Backgrounds of Obama and Cowen The USA is diverse. Obama comes not just from Offaly but from Offaly via Kenya, Indonesia, Hawaii and Chicago. Such dramatic journeys are not uncommon in America. There is drama too in the fact he is a half-black man in a country where, within living memory, an African-American man would have had to give up his seat on a bus. More important even than these nuggets of race and geography, it was a big help to Obama that he has a “back-story” that can only be described as epic. His Kenyan academic father left home when young “Barry” was two. His mother was dependent for much of his childhood on food stamps. In contrast, Ireland’s political classes are fairly homogenous. Brian Cowen comes, so far as we know, from Offaly via Offaly and was never discriminated against. Background and the political system Background is crucial in US politics. Most US Presidents come to the fore by championing their tribes, to gain a core constituency. Catholics, Jews, Hispanics, women, gays and blacks have all made self-conscious sorties into the Presidential or other important political processes. Because of the US’s diversity a President cannot be elected if he or she is seen to represent the members of only one tribe. Candidates typically use their tribes as a necessary springboard – and then extend their appeal to other tribes by policies. Candidates must try to get into the heads of citizens completely different from themselves. This forces them to think and campaign on a scale that is large and wide. In Ireland we have had a couple of Marys in the Presidency but female is about as politically “disadvantaged” as it gets at the summit; and an exotic or disadvantaged background does not necessarily count for much generally, and certainly has never given any Taoiseach any component of his initial platform. Assuredly Brian Cowen doesn’t try to represent much more than Fianna Fail. He seems comfortable being just Biffo. Trajectory of Obama and Cowen Background is fundamental but for Americans movement in the right direction is essential. The American dream is self-advancement.  Americans have a particular soft spot for people who make good from humble origins. Indeed politicians often compete with each other for claimed childhood impoverishments in the electoral equivalent of the Monty Python “child down’t mine” sketch. For Obama the later upswing is just as dramatic as the initial disadvantage. Barack made it to Columbia and Harvard Law School where he edited the law review (but chose a career in community activism). He is even a multi-millionaire from autobiography sales. In Ireland, fewer politicians seem to make good from deprived backgrounds and they do not seem to be much prejudiced electorally by coming from above-averagely advantaged backgrounds. The epic sense is not really possible in Ireland. Unless perhaps you live, as no-one ever again will, through a war of independence and civil war and, almost alone in Europe, understand the theory of relativity (like DeV). Cowen’s “back-story” – boarding school, GAA, pouring pints in Cowen’s of Clara (which is shortly to be demolished), then on to UCD and a baby amount of marijuana in the Belfield Bar before twenty-five years in politics – could not be more prosaic. We should not blame Cowen for not being epic. There is nothing he can do about the principal differences between his makeup and that of his future US counterpart.  They are all too real but they are not Cowen’s fault. Mandate The US presidential system entails a system  of caucuses and primaries followed usually by a slog-out with a single main opponent in the general election. Obama crossed America repeatedly for two years, during which his every foible and quirk was minutely scrutinised.  Barack’s pastor, his wife, and Sarah Palin’s daughter’s domestic deviancy became  worldwide themes. America, indeed the world, knew the President it was getting by the time Obama faced his electorate. He has a rock strong mandate for the change he proposes. In Ireland the Taoiseach is chosen by the elected parliament. In practice this means that he is chosen by the largest political party. Usually the candidate Taoiseach is known before the election.  Cowen, however, fell into the position without any public campaign or election, after Bertie Ahern anointed him and then resigned. No-one ever noticed who administers communion to Brian Cowen. Nobody paid much attention to his wife’s pride in her country. Nobody really scrutinised his character at all, until now that he has  approval ratings of just 26 per cent in opinion polls. It seems they do not like what they have gotten. Policies The US system’s requirement to knock out a range of opponents requires that the candidates differentiate themselves. This conduces to formulation by candidates of clear policies. The combat that Obama braved against Hillary Clinton and then John McCain required him to articulate clear policies. The Irish system

    Loading

    Read more

  • Posted in:

    Fianna Fáil in government has changed us all

    Only the allegiance to the personal over the political kept us – relatively – sane. Frank Callanan One of the least-considered characteristics of Irish politics is that which has most defined it: the ascendancy of Fianna Fáil. This asserted itself between 1932 and 1973, broken only twice, gave way to a pattern of alternance (rotation) over the quarter century 1973-1997 and then seemed to re-establish itself in the general elections of 1997,  2002  and 2007. It was as if the electorate had acquired, and then lost, the knack of turning Fianna Fáil out. There is a remarkable dearth of analysis of, and reflection on, what might be called the macro-psychological effects of the decade of three consecutive Fianna Fáil election victories on civil society including the media, opposition and civil service. These were considerable, even devastating. The most obvious effect of a return to Fianna Fáil dominance was on the public service whose independence and professionalism were placed under attack at a number of levels. However, it certainly did not stop there. Every person in the state who was not in one way or another signed up to Fianna Fáil had to come to terms with its dominance of government in Ireland. There was what might seem a mild form of self-censorship: not that one feared to express opposition to Fianna Fáil or identify with an opposition party, but that one did not wish to appear a raving lunatic. One did not want to bang on, to appear at odds with the fact of Fianna Fáil governmental hegemony, to seem unreconciled to a semi-natural law. At a political level, opposition politicians – however dismayed –  persevered in opposing, but in civil society opposition became in some degree a matter of a mild form of passive resistance, a refusal of mental assent, almost a bearing of witness: but all a little intellectually muted. This was partly to do with the pace of what purported to be economic development, but owed something too to the political genius of Bertie Ahern, whose most under-rated skill was that he knew as Taoiseach to give the minimum of tribal offence, of gratuitous provocation, to those not of his clan. I can perhaps transcend any perception of personal partisanship by identifying and addressing what I think is an important historical phenomenon: an overwhelming political characteristic of the years through which we have lived. So, what was the effect on each of us individually of the remorseless electoral ascendancy of Fianna Fáil from 1997? We all had to choose a mode of being, a discursive protocol in that Ireland. We can’t grasp what happened without asking that question, without pondering the impact on others of sustained ascendancy, over a very sustained period in a small state, of  Fianna Fáil (and the Progressive Democrats). In his superb recently-published extended essay ‘Ill Fares the Land’, the contemporary historian Tony Judt discusses intellectual inhibitions – in the wake of the Thatcher and Reagan revolutions – on the discussion of social democracy (whether called by that name or not) and on public provision. He considers that “our disability is discursive”. That discursive disability afflicted economic debate in Ireland too. One might throw in the peculiarity that many, if not most, Irish people somewhat bizarrely continued throughout to think of Ireland as, socio-economically, a centre-left state. My principal purpose, however, is to borrow from Judt the term ‘discursive disability’ and to apply it to the dearth of analysis of the effects on civil society of the reversion to Fianna Fáil hegemony without alternance from 1997 to date. It may be that the thesis requires a novelist, a combination perhaps of Colm Tóibín and Ross O’Carroll Kelly, or awaits a historian still in primary school. In the initial upswing of the boom, my own sense was that people wanted to be left in peace, to enjoy undisturbed, only for a while, a modest onset of prosperity, and not be hectored by church or state, not to be nagged by economists and intellectuals – never mind opposition politicians. In the longue durée of Irish history and the shorter course of Irish statehood, the wish  for a momentary respite –  to be allowed to come out from the chill of the shadows and stand for a while in the sun – was not without poignancy. It is hard, however, to bring such respites to a close, and the craving for remission was thoroughly understood and exploited to the hilt by the then Taoiseach. My point is that there was, and continues to be, a striking lack of self-awareness, of reflexive consciousness, of the peculiar state of living in Ireland over the Ahern decade, and not being Fianna Fáil or Progressive Democrat. This also had a marked effect on the media, which had to negotiate this strange psychological state. Some commentators, without necessarily having thought too much about it, came to regard Fianna Fáil’s ascendancy over the opposition parties in brutalistically Darwinian terms. The country had seemed to lose the most modest and most under-rated virtue of democracy, the habit of alternance. The phenomenon was cumulative. Without changes of government, the sense of the necessity of politics atrophied. The electorate was habituated to Fianna Fáil governance, and – somewhat unfairly, certainly by the 2007 election – the lack of governmental experience became a reproach against Fine Gael and Labour. The abuse of power to which the state transpired to be most vulnerable was the remorseless use by a government of its powers not for the conventional ends of government but consciously and systematically to perpetuate itself in office. Legal and political accountability is achieved primarily through the political system and the political culture. The origins of our present discontents are political rather than economic, something we remain a little shy in acknowledging. That the Irish state, so jealously nurtured by successive regimes from 1922, went off the rails for a decade is in the first instance a political issue, though the most devastating consequences were

    Loading

    Read more

  • Posted in:

    Increase Corporation Tax

    Multinationals mostly assess their operations on their pre-tax profits anyway by Mark Lonergan There has been uniform acceptance among advisers and policy-makers that Ireland’s low corporate tax (CT) rates have been  a major stimulus to industrial investment since the 1950s and a cornerstone of the Celtic Tiger. 580 US multinationals located in Ireland  and close on 100,000 Irish people are employed in Ireland by these firms. However, this corporate fiscal landscape may be about to change as there are rumblings that President Obama and his new régime are not best pleased with the existing tax regime. Given that Obama has adopted a hugely ambitious public-spending programme, he clearly needs to generate as much tax revenue as possible. Robert Shaplo (an adviser to Obama ) in particular has recently commented on Ireland’s over reliance on foreign investment. While the US cannot compel Ireland to increase its corporate tax rate, the US government could in practice – by closing of tax deferral loopholes –  make the 12.5% corporate tax rate null and void. Hot on the heels of the US scrutiny, there have been discussions in the media over the past few weeks that the new rules introduced by the European Commission mean that the Commission will exercise an oversight over the national budget of member states in the future. This oversight could conceivably be the death of Ireland’s 12.5% rate, as the Commission would seek to level the playing field. The Irish policy-maker faced with possible attack on two fronts could be forgiven for alluding to Claudius in Hamlet:  “When sorrows come they come not in single spies but in battalions”. In light of the possible changes in American tax law and changes to the EU Commission rules, it is apposite to consider if the CT rate is too low. Such an examination is necessary as the recent Commission on Taxation report were exempted by the terms of reference from even considering the CT rate. A quick comparison with other countries would suggest that the rate is too low. The UK rate is 28%, the German rate is 30% and the US rate is 39.5%. On the face of it, 12.5% is too low; it is an artificial state aid to the corporate sector.  It strikes at the equality of the tax system, particularly since personal tax-payers are now paying effective tax rates of up to 55%. We currently have in effect a third-world corporate-tax level.  The idea was (or should have been) to entice Foreign Direct Investment (FDI) with tax breaks and then gradually raise corporation tax so that they would pull their weight.  Essentially what we have got is a form of American imperialism.  They essentially take our resources, our labour, our land and infrastructure and send it back to their own country. Granted these companies give a small fraction back in the form of wages and 12.5% profit. These multinational companies (MNCs), as recent job losses in particular at Pfizer and Dell have shown, are completely footloose: ready to leave as soon as we become expendable. The low-company-tax régime can be seen as part of a conservative low-public-service ideology – a “race to the bottom” by nation states to attract FDI at any cost.  The result is we have an extraordinarily low ratio of tax to  GDP compared with other EU countries. Many MNCs could afford to pay a higher rate without much effort and are located here for reasons which are much more complex than our attractive CT rates.  The few that would pullout because of the rate rise would pull out anyway. The IDA and Forfás have to say a low CT rate is essential.  It is part of the raft of incentives for location in Ireland but if the low nominal rate is the overriding reason for locating in Ireland we are in trouble. In my experience with Finance Directors of MNCs, there have been varied responses when I have broached the question of the low tax-rate.  Many say they are judged by their parent companies on their pre-tax not post-tax profits anyway; others say that their MNC tax-planning is so complex that they do not require a low rate in Ireland. Ireland in 2010 needs to invest in public services particularly in health and education to build a healthy indigenous knowledge-based economy in line with the Scandinavian model.  The raising of the CT rate to an 18–20 per cent rate would have little impact on employment; it would still be low in comparison with other EU states. A one-off change in CT is needed to redress the current fiscal gap. The present fiscal deficit is alarming. Approximately € 10 billion of the 2007 Tax take was property-related in terms of VAT, Capital Gains Tax and stamp duties. Revenue from these taxes is unlikely to pick up soon. This fiscal gap highlights the need for a clear need for a more sustainable source of Revenue for Government rather than increased Governmental borrowing. Raising the CT rate would also end the resentment from other European states, particularly Germany and the UK, at our low rate. The choices are – do we stick with the 12.5% race-to-the-bottom rate or have we national confidence that we are sufficiently vibrant, young, educated and attuned to the needs of foreign companies to to raise the CT rate to 20%. The result would be a more broadly-based and fairer tax system and increased tax revenue for public services. Mark Lonergan is a Chartered Accountant working with MNCs

    Loading

    Read more

  • Posted in:

    David McWilliams … and the vindication of his impure capitalism

    Interview Miriam Cotton I recently spoke to David McWilliams in his Volvo Estate in a church car-park in Dalkey. In case that sounds intriguing, the purpose of our meeting was to conduct an interview – on recording equipment that does not cope with background noise in public spaces like the coffee-shop we had just left. McWilliams has a strong personal presence and is possibly one of the most cheerful people you are likely to meet. He is greeted warmly in his locality where most people appear to know him.  During the last year alone, he has travelled the world on a punishing schedule while making the documentary ‘Addicted to Money’, chaired a series of the comedy show ‘The Panel’, finished writing his book ‘Follow the Money’ and organised the controversial Global Irish Economic Forum at Farmleigh – among many other things. MC: I want to ask your opinion about the economic crisis and Irish media coverage of it. Morgan Kelly has referred to “group-think” by which he means how during the bubble there wasn’t much criticism of what was going on. In the aftermath, we now have the ‘there-is-no-alternative’ to NAMA version of group-think . Who or what makes you angry about the way the media is behaving both during the boom and afterwards? DMcW: I think it’s quite obvious what I thought during the Celtic Tiger because I was almost completely on my own in saying this is a huge bubble. I’ve always thought that. I was vilified – well maybe not vilified – but slagged off. Ireland is constantly terrorised by conventional wisdom and anybody who breaks with it can expect to go through a three-phase process: the first phase is ridicule; the second is violent opposition and the third phase is the universal truth phase when everyone says “sure we all knew it was a bubble at the time”. And that’s what happened to me. It’s no big deal. In Ireland we feel we need permission to ask the obvious. It doesn’t really make me angry – but it makes me sad. With regard to the 2008 bank guarantee, people have accused you of inconsistency since at first you appeared to claim that the Minister for Finance, Brian Lenihan, was acting on your advice but subsequently distanced yourself from the guarantee. Did you change your mind? Well, first of all, I don’t think changing your mind is the end of the world. The bank guarantee that I discussed with Brian Lenihan involved a guarantee that would be rescinded after two years specifically. In a way, it was a bluff, not a policy. Once this guarantee started to be regarded as a blanket underpinning for all sorts of loans – then it changed materially from what I was discussing with the Minister for Finance. The first thing is, if Brian Lenihan lets the guarantee lapse after two years, which it is legally supposed to, then it has worked completely. Then we’re back to square one whereby we are in a position where we can simply get the creditors into the room and say “listen lads, we’ve no money”. The whole idea was supposed to stop a run on the banks. It’s like being a fireman in a forest fire where you have to ask yourself whether you stop it or let it blaze on. And the second thing is the guarantee has given two years to figure out how bad things are at the banks – and it’s not just Anglo; it’s across the board. Once you’ve figured it out, you simply withdraw the credit and say to creditors “sorry guys you simply backed the wrong horse and let’s do a deal”. And that’s capitalism. But what’s happened in the last while is that it’s being said that what is good for the banks is automatically good for us. But didn’t you depart from your capitalist principles by recommending a guarantee in the first place? I’m not a pure capitalist. I think that what you’ve got to do if you believe you can stop something traumatic from happening is do it. I don’t believe in this Austrian School idea which says that all recessions are the seeds of the next recovery – or that humans are infinitely able to react to unemployment. They’re not. My father was laid off many years ago and I know exactly what it’s all about. Humans are not machines. One of the reasons a run on the bank is disastrous is that the big guys get out first. The little guys are shafted. So there is nothing inconsistent in what I’ve been saying. What is the distinction between Lenihan’s version of the guarantee and your own? I hadn’t expected that the guarantee would extend to sub-prime debt. If we let the guarantee lapse this coming September as it is supposed to, it will have achieved its aims. It will not have been a flawless policy but the best we could have done in the circumstances. The least worst thing? I don’t want to be wise after the event. I was very vocal both privately and publicly in saying we had to do something quite radical and different – something that takes the markets by surprise. Having worked in the markets, I know what they are like. In many ways this is just a bluffing mechanism. You’ve got to hit them where it hurts – do something that is so outlandish that they back off – show them you are in control. It surprised more than just the markets, though. But what was the alternative? To let the banks go bust? What the Europeans have just done with Greece and the Euro crisis is exactly the same thing – it’s effectively a blanket guarantee. A lot of people suspect that NAMA at its core, particularly the Special Purpose Vehicle, is essentially corrupt – that the secrecy about exactly who, what and how much is involved may be designed to cover up and compensate

    Loading

    Read more

  • Posted in:

    Éamon Gilmore interviewed

    Interview Niall Crowley  Illustration Peter Hanan Baking sunlight, little dinghies bobbing on sparkling blue water, people in short sleeves taking a leisurely look at the shops. Dun Laoghaire is like another world in the surprise heat wave. The function rooms of the Royal Marine Hotel are tall and cool. The bar looks out over a generous green lawn. Éamon Gilmore, however, makes no concessions to the relaxed mood, with full suit and tie, a busy man  man on a lazy Friday afternoon. He has just come from speaking at a local rally. ‘There’s been a strike for over six weeks now in the main street. It’s a difficult dispute. I previously made an attempt to mediate, to see if we could at least find a basis for talks”. He emphasises the human side to the dispute. “There’s a lot of stress for the people involved, their families, and for the employer too. Ultimately it will have to be settled and I hope the event will cause the employer to reflect on where he is at and to go to the table. There is no dishonour in talking”. There is a function to attend later. On Saturday morning he will be out canvassing. “I get a group of Party members and we do a different housing estate every Saturday morning”. He breaks into laughter. ”It’s a service we provide to get people out of their beds if they’re not up by eleven thirty”. He emphasises “for me it’s the best focus group there is, to hear the take of my constituents on the issues of the day and to talk to people about their difficulties or issues or problems”. On Sunday he will be launching a Labour Party policy document on tourism. Monday then is the day for his constituency clinic. “As leader of the Labour Party it is now a seven day commitment”. He is animated by the events of the moment: “This week, the Fianna Fáil-Green Government poured another €2 billion of taxpayers’ money into the hole in Anglo Irish Bank, despite not knowing either how big the hole is, or whether it is in anyone’s interest to bring Anglo back to life.  Last week the taxpayer became the majority owner of EBS, at a cost of at least an extra €100 million, and nobody batted an eyelid. In the same fortnight, we hear about the chaos in the HSE, that had someone as at risk as Daniel McAnaspie wandering from Garda station to Garda station, looking for a bed for the night.  Even more chaotic, is that they did not even know how many children had died in care over the past ten years”. And he believes the hangover from the boom, and the need to rescue the banks, is |”going to be used by Fianna Fáil as an excuse for not delivering the kind of services that could be effective in cases like Daniel McAnaspie’s and others like him.  Frankly, those excuses are ten years too late, and coming from a Government that seems incapable of managing their filing cabinets, let alone the vital organs of the State and the financial sector”. Gilmore sees hunger for change everywhere, ”across all groups. There is much more discussion now about wider political and social issues. There are some who yearn for things to go back to where they were. They can’t and they won’t. Obviously the type of change people want reflects the kind of lives they are leading”. He is optimistic that “the future can and will be better for our children. But it won’t be measured only by material things. It will be about the kind of society we live in, how we relate with one another and the values that underpin that”. He was recently reminded of Pat Rabbitte’s poster campaign in 2006, in the run in to the 2007 election. The posters asked “But Are You Happy?” He laughs that ‘the big debate was should there be a comma’. However, “looking back on it, it was at the height of the boom, it hit the nail on the head. It was raising the values question”. ► Pursuing Equality What priority does the Labour Party accord to the value of equality? “Equality is part of the DNA of Labour. It is what you expect the Labour Party to do, to drive equality”. ‘”We have to pursue an active policy of promoting equality. There is an equality agenda that has to be pursued that is not dependent on legislation and that is more to do with how we do our business and our practice. We have to pursue the idea, that more equal societies are better societies, are better economies. It is not an accident that the five countries that are most at risk of economic failure are the most unequal countries in the European Union”. What are the possibilities for a new departure on equality with a new Government? “I see it much more now around issues and policies rather than necessarily around institutions. The agenda for Government will be much more around issues that have to do with socio economic equality”. “Employment is a starting point. It has to be at the heart of it. Labour’s  economic policy is about jobs and getting people back into work. This is the key foundation for equality. Education is another important focus. This means first of all increasing and enhancing educational opportunities. We need to move to universal third-level or further education. This is about equality in outcomes from our educational system”. “Health and medical care need to be available to people based on need rather than income. We have to forge ahead with the introduction of a system of universal health insurance.  This is a health reform agenda which is essentially about equality”. ”In social welfare we need a different deal between the state and the individual which provides for support in different ways and at different points in the life cycle. Education, childcare, care of

    Loading

    Read more