From Socialist Voice, January 2010

Why the media learnt to love this Government

Brian Lenihan was recently compared to Superman in the press. After a period when the Government was much criticised, it is now receiving much more favourable media coverage. But what has brought about this change of fortune? And what exactly has this Government achieved?
     Three Government “successes” are the key to the about-turn: the passing of the Lisbon Treaty in the second referendum, the passing of the NAMA legislation in the Dáil, and the introduction of a deflationary budget.
     Lisbon has been oversold by the left as a one-off jump towards an integrated European state. This is an unhelpful simplification and had the effect of making it harder to present the case against the treaty. Lisbon is part of a process that has a clear objective, but it is only a part of the process, and with or without it the process would continue. As such it is full of caveats and conditions: unanimous votes of all member-states are needed to implement many of its policies.
     Reading the text of the treaty, it is clear that the European elites wish to project European power, economic and political primarily but also military, on a global scale. They feel that they are not able to exert the influence they believe is their due on world affairs and want more than anything to remedy this situation.
     Their exclusion from the crucial side meetings at Copenhagen was chastening for them, particularly as it came after Lisbon. While it is dressed up in the language of “soft” power, humanitarian objectives, and democratic values, it is simply an expression of old-fashioned imperialist desire and intent.
     Lisbon is about empire: the European Union exerting power externally in pursuit of its own interests.
     With regard to NAMA, there has been an under-analysis on the left of what it is about and what the consequences will be. This is in part excusable, because there are so few economists bringing even a social-democratic view to bear on these issues, let alone a socialist one. But it is only partly excusable. If the professional economists are not going to provide the basic information and analysis that we need, then we must do the groundwork ourselves.
     It is not possible to engage credibly in the public discourse about these issues unless we are properly prepared and armed. This ideological struggle plays a vital role in determining outcomes in society, and it must be properly contested.
     NAMA, on the face of it, is intended to buy large property and speculative debts from the banks that the builders and developers are no longer able to fully repay. The purpose of relieving the banks of these bad or failing loans, we are told, is to allow them to resume their important role in providing credit. Speaking in the Dáil, Brian Lenihan made it clear that this included credit both to businesses and to households. Otherwise viable businesses that cannot now get credit from the banks would be given a new lease of life, while households would be able to renew spending on mortgages and consumer goods.
     The state is being supported by the European Central Bank and the European Commission in keeping the NAMA money out of the Government accounts. This will allow the Government’s spending figures to be massaged to allow them appear to be within the limits of the Stability and Growth Pact for debt-to-GDP ratio and the Government deficit. This enables the Government to borrow money for the purposes of NAMA and stay within the rules, while it cannot do so for social or economic projects that might further the common good.
     The beneficiaries of NAMA appear to be the banks, which will receive taxpayers’ money to relieve them of bad debts in the property sector; the builders and developers may also gain through lenient treatment from NAMA (though this is denied by the Government). The ECB and EC also gain, by the forestalling of a crisis in the Irish banking system that might have put pressure on the euro and on economic and monetary union or obliged them (instead of the Irish taxpayer) to prop up the Irish banks.
     But the whole NAMA enterprise offers little to ordinary citizens. Encouraging a renewal of lending and increased household indebtedness suggests that the Government, like its counterparts elsewhere, sees little hope of the productive economy providing a vehicle for economic growth; instead it pins its hopes on the financial and casino capitalism that fuelled growth in recent years and a new credit bubble—the very policies that led to the present crash.
     Bailing out the banks, taking on their bad debts and restoring their profitability means that all the pain will be borne by ordinary citizens, while all the gains will remain with private owners. Nationalising the banks without compensation, or abandoning them to their fate while establishing a state bank and putting the NAMA funds into socially useful projects, would be far preferable for the common good.
     The forcing of the Irish state to return to the Stability and Growth Pact limits over a few years, while keeping its support for the private banks off the balance sheet, is a shameful fraud. But it furthers the neo-liberal agenda of the European Union by attacking the public sector and promoting privatisation and competition where it suits the elites (competition and a race to the bottom in workers’ pay and conditions, but monopoly and concentration elsewhere, for example in the banking and financial sector).
     The budget for 2010 has been much praised in the media. However, it does not require specialist economic training to understand its central thrust: to attack the pay and conditions of workers and undermine and cut back the public sector, especially what is known as the welfare state.
     It is a classic example of the Government implementing policy in the interests of the wealthy and the owners of capital—so, of course, the media that promote those same interests think the budget a very good thing.
     Brian Lenihan defends the budget on the grounds that everyone is bearing a fair and proportionate share of the burden of the downturn. Here again the left has missed the point to an extent: arguments have tended to insist that those who created the crisis (bankers, developers, politicians) should pay for the crisis. While there may be some justice in such sentiments, they tend to obscure the more important fact that capitalism is the cause of the crisis and the minister’s idea of fairness is a cynically self-serving one.
     While we support policies that make the rich pay for the crisis and for decent public services, emphasis must also be placed on the structural limitations and failures of capitalism. And if the minister believes that taking 20 per cent off someone taking home €150,000 per year and 4 per cent off someone on jobseeker’s benefit of €10,600 is equitable and progressive, it is not. On the contrary, it actually protects the interests and privileges of the better off at the expense of workers and the poor.
     Lisbon, NAMA and the budget are no more than episodes in the class struggle that is waged daily in our societies. The world that they create and sustain is the impoverished world of capitalism and is riven by class division. In this world the workers who create all wealth in society are excluded from the enjoyment of that wealth, are excluded from power, and are the first target whenever capitalism runs into one of its periodic crises.
     It is a world of imperialism, where the stronger states and groups of states seek to assert power globally in the interests of their national capitalist classes. It prevents the emergence of Marx’s humanist vision of society, where all can develop their full human potential.
     In this world, the interests of the rich and powerful always come before the needs and interests of those who create the wealth in society, the workers. The minister is prepared to borrow €54 billion and put it into NAMA to rescue the bankers; he is not prepared to borrow any money to protect social welfare, medical access for PRSI payers, disability services, or low-paid workers. He is prepared to reduce the wages of those below the average wage; he is not prepared to tax those taking home more than €1 million per year in an equitable way.
     While Brian Lenihan may deserve our sympathy for his struggle with cancer, he deserves none for his part in the class struggle that determines how the wealth that is socially produced by workers is distributed in society. He has taken the side of the bosses and capitalists, and he must be challenged with clear analysis and argument based on the ideas of Marx and socialism.
[CF]

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