Unfit to rule

The revelations around Anglo Irish bank expose the extent of corruption and fraud that exists at the top of Irish society. It is now clear that the Revenue knew about and went along with the fraud and insider dealing by Sean Quinn and others inside Anglo Irish Bank.

The super-rich and their bankers have brought us to the precipice of economic catastrophy. The Irish economy has seen the biggest collapse of any European economy. Cowen and Lenihan are intent on safeguarding the wealth and assets of this elite at the expense of everyone else.

They have spent the last six months whipping up a media frenzy through IBEC and the media calling for cuts to public services and a pay cut for public sector workers.

The entire political establishment have been demanding that ‘everyone take some pain’ to deal with the economic crisis. There was no social solidarity during the Celtic tiger years, no sharing of the gains. But now there is lots of talk about sharing the pain.

But have the rich taken any pain?

The top 1% of Irish society is worth €87 billion. These people include the likes of Sean Quinn who could afford to gamble €1 billion on Anglo Irish Bank and lose. If he can afford to gamble such sums then they can afford to pay a lot more tax.

There are over 4000 people registered as tax exiles in Ireland, at least 20 of these have a net worth of over €50 million. The government has not made any moves to force them to pay taxes here like everyone else.

The top 1% increased their wealth by €41 billion in the last four years of the boom . We now know where that money came from – dodgy bank dealings and property speculation. Why is there no talk of a ‘wealth levy’ on them or of raising capital gains tax to help pay for the crisis.

By simply scrapping the property releif landlords get we could save the state €1.4 billion a year.

There is no talk of punitive taxes on the nearly 20,000 people who earn over €200,000 a year.

These measures alone would pay the public finances.

When it came to the talks with the unions they weren’t even prepared to entertain the idea of tax increases on the rich. Instead they collapsed the talks and demanded a 20% reduction in living standards for Irish workers.

Far from ‘taking some pain’ the agenda of the bosses, IBEC and the government has been to protect the rich from the crisis by passing the burden on to workers through extra taxes and cutbacks.

Low paid workers like council workers or nurses are being asked to pay an extra €6000 to €7000 a year in tax while bank chief executives like AIB’s Eugene Sheehy still get €940,000 a year or Irish Life and Permanent CEO gets €750,000.

Far from the possibility of any ‘social solidarity pact’ touted by Labour and ICTU, the rich have set out to smash workers living standards to defend their wealth.

Why is the Irish elite turning to Thatcherism?

The strategy of the irish ruling class is different to that of Obama or Gordon Brown. Here there is no talk of a ‘stimulus package’, only of cutbacks and ‘competitiveness’ (code for low wages).

But Cowen, who gets paid more than the US President, is refusing to cut his own salary down to size.

The Irish elite made their money during the boom by becoming the most extreme neo-liberals. Property and financial speculation were the sources of the wealth of the super-rich.

They bet everything on the neo-liberal model with Ireland becoming a financial services economy. When the crash happened the money rushed back to the US causing an even worse crash here. All the tax cuts for business meant Ireland had less resources to deal with the crisis than other states.

Lenihan’s Thatcherite economic policies – demanding a balanced budget, refusing to borrow or raise taxes on business, are making the crisis worse. These are the same policies that the US government tried after the 1929 crash and led to the great depression.

All the talk of a ‘smart’ or ‘knowledge’ economy is pure hype. There is no investment in school buildings and more teachers nevermind in science equipment and computers.

The only solution bosses can offer is to smash wages and attempt to relaunch the atlantic tax haven so multinational corporations can avaoid even more tax through R&D subsidies. But the game is over for this strategy.

Capitalism is facing its greatest economic crisis in a century. It may be worse than the great depression. Cutting workers wages and living standards won’t solve the crisis as fewer people will buy things and will deeper the recession.

The only solution to salvage our future for the majority is to change the economic model.

That starts with kicking out this unpopular right-wing government.