September 2014        

Illusions of recovery

In early September the minister for public expenditure, Brendan Howlin, claimed that the Government’s economic strategy was so successful that “we’re not going back to boom and bust.” But he is not the first social democrat, and no doubt will not be the last, to make that grandiose claim.
     Slump and boom are inherent in the capitalist system, and recurrent crises cannot be prevented within capitalism but only by defeating capitalism itself.
     Capitalism is prone to sequences of slump and boom, coupled with wild financial speculation and property and asset bubbles. It simply cannot exist otherwise.
     All this is spin and bluster coming up to the budget and preparing for the next general election. Howlin and other members of the Government are creating a smokescreen, claiming that the worst is over and that all the pain was worth it; after €30 billion in cut-backs and tax increases since the crash, the end is in sight.
     From the beginning of this year the economic “experts,” the think tanks and the political establishment have been warning of the need for a further “adjustment” of €2.1 billion. The results of the local and EU elections have forced them to change tack, at least in public. Now they are holding out the carrot of a “neutral” budget. What this means is that the Government would neither increase the general tax burden nor cut total expenditure, in the belief that faster growth will ensure that the deficit target is met next year.
     But Howlin has exposed the sting in the tail. “Where we need to have additional expenditure in any area, that will have to be funded by additional expenditure cuts; and where we need to have easement of tax, where there’s an agreement, that will have to be funded by additional taxes somewhere else.”
     So if the people demand more they will be responsible if the Government has to increase taxes or introduce further cuts. Any new cuts or charges would be in response to public demand.
     Howlin also pointed out (as Socialist Voice has consistently done) that “austerity,” the massive cuts in public services and increased levies and taxes, are permanent. Likewise the attacks on workers’ wages and their terms and conditions. Ending the cuts “will not be possible, and nobody would believe it could be possible, in a single year or in a multiplicity of years.”
     The Labour Party ministers are attempting to be the bearers of the good news, holding out the prospect of increased spending on social housing. Both coalition partners are vying for the middle-class voters, holding out the carrot of possible cuts in income tax for the “coping classes.” A number of newly elected governments in EU countries have been promising similar tax cuts for the same class interests.
     Howlin also held out a carrot to public-sector unions with the suggestion that he would be inviting them to talks next year to explore the possibility of a winding down of the emergency legislation that gave the state, and himself in particular, the power to cut public-sector workers’ wages and pensions—an example of divide and rule.
     One thing we know for certain is that most of those who lost their medical cards will not get them back. The universal social charge will not be dropped. Service charges will grow, as will indirect taxes. The rich will get richer as workers continue to pay the heaviest price for the continuing crisis of this moribund system.
     Community services will continue to decline, the public health service will remain underfunded and schools overcrowded. In fact nothing will change, despite the false claim that the worst is behind us.
     There may well be a growth in the “economy”—in exports etc.—but that will not translate into better living standards; it will not mean an end to low wages, precarious employment and no-hour contracts and the spread of the cancer of internships.
     The Government is squeezing us into the carriage of a train and swaying it from side to side and telling us that it is moving forward.

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