Unity

From Unity, 24 May 2008

Government changes, but policies remain the same

by Eugene McCartan

Bertie Ahern has stepped down as Taoiseach and has been replaced by Brian Cowen, the former Minister for Finance, who was anointed by Ahern as his successor.
     It was a peaceful transition within Fianna Fáil. Although there are a number of new faces in the Government, it will be a case of “steady as she goes” as the economic crisis bites deeper.
     Unemployment is now the highest in five years; thousands of jobs have been lost since the beginning of the year, with the house-building sector of the building industry having all but collapsed. The other sectors of the building industry, such as road construction and other infrastructural projects, are still holding, but as the economic crisis deepens this will come under increased pressure.
     Over the past few years a lot of infrastructural spending was met by the growing tax income in a whole range of areas. As tax revenue has taken a massive hit with the downturn in economic activity and consumer spending, the tax available to the Government has shrunk drastically, which will mean that it will have to borrow money in order to fulfil the many projects planned or started.
     The Health Service Executive has imposed drastic cost-cutting measures throughout the health service, and an employment embargo, in order to force hospitals to live within budget. The HSE recently announced that it was looking for thousands of redundancies in the health service, which is already creaking under the pressure.
     The new Government will continue to impose stringent cuts across the board as the state’s finances are reduced while unemployment continues to rise.
     Since the beginning of the year we have seen the closing of a number of manufacturing plants around the country, with the loss of thousands of jobs and the income that they bring to local communities. Many are moving either to China or to eastern Europe as Irish workers are being forced to benchmark themselves against wages and conditions available there.
     The growing recession in the United States is having a marked impact throughout the world. It is hitting Ireland particularly hard, as nearly 30 per cent of Ireland’s exports are to the United States. The “sub-prime” crisis is not the sole factor but is added to the growing (and, some commentators are now saying, unmanageable) debt crisis in the United States, which continues to print money to finance the wars in Iraq and Afghanistan.
     The new Government, like previous ones, has ceded the necessary economic levers for dealing with any crisis to the European Union. We have no control over interest rates, while having to maintain borrowing within the limits set by the “growth and stability pact,” leaving very little room to manoeuvre.
     They have placed all their economic eggs in the one basket of transnational investment and the wholesale privatisation of public assets. They have constantly pushed the state out of having any economic intervention role and to become a mere observer. They have forgotten the lesson of the past and have firmly rejected Keynesian economics.
     It is always the case under capitalism that when times are good the minority gorge themselves and grow more bloated while the majority may get a little more, but when the downturn comes the minority still grow bloated while the majority are hit hard as the government cuts back. This is when the true nature of capitalism and the role of the capitalist state is exposed. No matter what, the minority always win out, slump or boom.
     As the unions begin to set out their stall in the new round of “partnership” talks they are ill prepared for the new economic and social climate, with a very aggressive employer class and a Government determined to make workers pay as the crisis bites deeper. The need for resistance is growing, and the fight against the Lisbon Treaty is just the beginning.

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