Sunday, 4 October 2015

Thumbs up for Recovery at Davos.

 With the general election seemingly destined to take place in late November of this year the narrative of the campaign will be dominated by one word; "Recovery".

Labour and Fine Gael will trumpet that they are delivering a recovery, pointing to unemployment figures, increases in GDP and other economic indicators. They will also brandish their bag of goodies in the form of the recently announced €27bn capital investment plan.

The opposition will maintain that all is not as it seems with the economic figures, that they do not tell the whole story, pointing out that many have not seen any improvement, that the "recovery" has not filtered down to much of the middle and working classes. That many of the new jobs are of poor quality, low paid and insecure with low hour contracts. They will also rightly point out that schemes like jobsbridge as well as continued emigration mask the true reality. It will also be hammered home that the policies of Fine Gael and Labour have favored the wealthy and left behind the majority, that inequality has increased  and that the most vulnerable in society, the very young, the sick, the disabled, the old, have been the harshest hit by austerity and that this has been by design. 

They will, as Sinn Féin for instance have stated, argue for a "Fair Recovery" or as Paul Murphy of the SP/AAA puts it; a "Real Recovery".

All of this is fair, true and laudable enough but we need to ask what is meant by "recovery"? 

To take it at its meaning it suggests a return to normality or to how things were before, to the state of affairs prior to the great calamity of austerity. But do we really want to go back? Do we want a "recovery", or to build something new?

This is not to suggest that Sinn Féin or any other party on the left are in favour of "going back" but my point is that the "recovery" narrative of the establishment parties needs to be challenged in it's entirety. The Celtic Tiger of boom and bust is not something we should wish to return to. This cycle is something which is systemic in the capitalistic system, so in that sense it is "normal". Do we want to "recover" this normality? A "recovery" in the meaning of the establishment parties is not something which is desirable and this point needs to be made, any "buying in" to the recovery narrative suggests, subliminally at least, that things are heading somewhat in the right direction.

We need to examine in greater detail the facts and figures behind the Celtic Tiger. The economic growth was almost solely based around the construction/property bubble and the resultant financialization of the economy with ancillary employment in that area. In terms of fundamental growth in the economy there was very little, it was all about the bubble and it was always destined to burst. 

Far from ordinary people getting rich, they got poorer. Wage levels in recent decades have largely stagnated but instead growth has been fueled by more readily available credit. We can see from the table below how debt rocketed thoughout the "good years".

Despite the on-going "recovery" Irish households are the third most indebted in Europe. The Irish government, and its people in general have been lucky that interest rates have remained extremely low, it is this which has facilitated the "recovery" more so than any policy over which the Irish state has direct control or influence over. Given the debt levels and openness of the Irish economy we are extremely vulnerable to any international "shocks" even those as straightforward as small interest rate increases. 

We are at the mercy of the international finance system. Given the small size of the Irish economy perhaps this is inevitable but our over-reliance on FDI to provide jobs and industry is something which is self inflicted. 

To get back to the point of this article, we should not look for a "recovery", we should look for an alternative. To those with original ideas and those who seek to build a sustainable alternative, one which puts as much control as possible in the hands of the Irish people and not that of international bodies, markets or oligarchs. 

We need to get out and support those on the left in arguing for systemic changes, not mere tinkering around the edges,  otherwise we will find ourselves going down the same road again.

We need an alternative to what went before, not a "recovery".

Posted by Saoirse Go Deo On Sunday, October 04, 2015 No comments


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    This is my personal blog and all herein is merely personal opinion expressed solely on my own behalf from my viewpoint as an Irish Socialist Republican.

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