Most political societies are divided along lines that are broadly left and right.
Not here.
We all know that there are oddities in the political system in Ireland.
Politics in Ireland still suffers from a civil war hangover that means our two largest parties are both ‘right-leaning’, the only option today being the now meaningless choice between a ‘pro’ or ‘anti’ treaty government.
The soft left in Ireland, represented by the Labour Party, is making strides in the polls (as it always does in an economic downturn), but it will have difficulty turning good poll results into seats in the Dáil, due to the concentration of its support in urban areas.
None of this should be news to anyone, but to an outside observer, it might seem odd that both of our (current) largest parties are broadly to the right in political terms.
This confusing right/right/left divide in Irish politics hides the true divide in Irish society, which is between the rich and the poor.
This is not a purely political or social point, because the lesson of this global crisis is that the economic performance of more equal countries has been better than those that tolerate large disparities.
Anybody who keeps an eye on economic data (like unemployment numbers or GDP) will know that such figures are always reported as percentages of something else, or percentage changes in the previous level.
For economists, this makes sense, but many of the rest of society percentages are just away of hiding the reality behind some of the figures.
For example, I was talking to a friend the other day. He has been living on social welfare for the past year.
He has two children in school.
As always these days, the conversation quickly moved to the forthcoming budget and the cuts that it would bring.
His view was that a 10 per cent cut to social welfare was coming, and he was genuinely scared about what this would mean for him and his family.
‘‘A 10 per cent cut across the board might sound fair, but a 10 per cent cut for someone on a good civil service income might mean only one holiday a year.
For me, it means running out of money on a Wednesday instead of on a Thursday.”
This statement jolted me from my admittedly cloistered journalistic world. In truth, I haven’t run of out cash in the middle of the week since I was a student, and didn’t need the cash anyway.
But here was an old mate describing the terror of Thursday, when there is absolutely nothing left, when he has to look his children in the eye and they know what that look means.
For my friend who, like many, largely missed the Celtic tiger and the property boom – despite having a decent job which he lost two years ago – the cuts that are coming seem grossly unfair and unequal.
He was nearly in tears as he showed me the front page of last Friday’s newspaper, with the headline saying that the government had paid €30 million for advice during the banking crisis, which turned out to be useless.
‘‘Tell me how a 10 per cent cut in social welfare is fair, and that €30million is ‘good value’,” he said.
Of course, I couldn’t tell him, because it certainly isn’t fair or good value.
The €2.5 billion the NTMA has put aside for the costs of running Nama is not good value either, nor is it fair.
And what about the fact that there are more than 60 solicitors’ firms on the payroll of Nama?
My friend, who has never been a radical, dismissed Nama as a ‘‘class rescue scheme for the professional classes’’.
As he headed off, I asked myself, ‘‘How far is he from taking to the streets?” There are now hundreds of thousands of people like him.
Unemployment, as measured by the live register, has risen from 4 per cent to nearly 14 per cent in the past few years. It can be described clinically as a ten percentage point rise.
Others looking for context might use the line, ‘‘it was worse in the 1980s’’.
As a percentage, the number was higher in the 1980s,but the real story is that the actual number of people on the live register now is at the highest it has ever been.
Each of the approximately 450,000 people on the register has a different story of the misery, but we mostly chose not to listen.
Instead, by hiding behind percentage points and cold statistics that disguise this misery in our society, our politicians are being true to their right-of-centre leanings.
For me, the idea of your own children being ‘‘knowing’’ enough to realise that look on Daddy’s face on a Thursday means that there is no more money is enough.
At what point do these people crack? Will it be when they hear the public sector unions warn about further ‘‘draconian’’ pay cuts?
Will it be when another billion euro goes into the banks? Or will it be when the banks foreclose on yet more houses?
Your guess is as good as mine, but old fashioned political analysis suggests that there is a point where the whole thing blows.
What will that point be? When will formerly chilled-out, well-balanced people like my friend say, ‘‘that’s it’’?
Last Friday, his anger was directed at the average public servant.
Whether this is fair or not (and I don’t happen to think it is) the fact is that, in 2002, average weekly wage public sector earnings were €704.
They are now €904 – a rise of €200 per week, which is about the total dole payment for my unemployed friend. Remember, both the public sector worker and the welfare recipient are dependants of the state.
Against this background, and ahead of huge decisions on taxes and spending, it is interesting how little this government taxes income.
We can see from chart 1 that we have the lowest rate of tax on income in the EU at 24.6 per cent. This will rise substantially in the years ahead. Indeed, chart 2 shows we have the lowest rate of government revenue as a percentage of GDP in Europe.
This will have to rise. We know that tax increases hurt the rich.
We also know that expenditure cuts hurt the poor.
We also know that the number of poor people is rising very rapidly.
My friend wasn’t poor two years ago; he was getting on fine.
Today, he is on the breadline.
There are hundreds of thousands like him.
When will he crack?
Have the gardaà considered what the tipping point will be?
Do they have an estimate for this economic tipping point – when they put on the riot gear?
A budget that is biased towards more cuts than tax increases, which thus widens the gap between rich and poor, must surely bring that day a bit closer.
They will be known as the Christmas Riots.
We have a tendency to simmer, fume and explode. It characterises all resistance thus far in our history. And our mythology is full of it.
Storm’s a coming.
Hi David, Good article – I would make the point, however, when you say: “We can see from chart 1 that we have the lowest rate of tax on income in the EU at 24.6 per cent. This will rise substantially in the years ahead. Indeed, chart 2 shows we have the lowest rate of government revenue as a percentage of GDP in Europe.” that the neither the tax rate issue nor the spending issue is as simple as you state. On taxes, tax free allowances in Ireland are €18,000. In France and Germany they are €6,000-€7,000. On the other… Read more »
Whether we like it or not, we are heavily dependent on external institutions such as ECB or possibly IMF, for national recovery. Whilst the thoughts of riots can be seen as more of a possibility as more & more of the population hit breaking point, it would send a very bad message to the rest of the world, and may cost us a lot more in the long term. Perhaps those who are feeling most marginalised can put their energy & resources into creating a truly left of centre alternative, and shift the power away from the pro & anti… Read more »
When will the people crack? , I predicted the property crash in 2000 and thought it must come by 2002, but alas I was 5 years early. Yes, the Irish will crack, but when?. Will “crack” mean that the Irish will refuse to vote for FF,FG and Labour ( the “all the same” far right parties ) or will the “crack” mean petrol bombs and riots ?. I just don’t know. The “government” has built a powerful machine consisting of RTE and the news papers, they have a police force and a legal system totally at their behest. I simply… Read more »
I disagree. Firstly, most parties here hog the centre left position. And all of them move to the left when they thing it is opportune to do so. Secondly, FF are not right wing. FF had one right of centre front bencher in the last ten years, McCreevy, and he got shafted. In his absence the rest of them all went on binges of state spending programs of one form or another. Thirdly, the only party that is liable to take a right of centre position on anything and stay there when an argument starts is FG. Additionally, the political… Read more »
The real divide in Irish society is between those who are connected/able to stick their snouts in the trough – and between those who are not. Opportunities are restricted. And anybody who is an outsider, and who allowed the media coverage of the last fifteen years to cause you to forget this very simple and undeniable fact concerning the Irish and the Irish economy, is screwed. It pays to be extremely sceptical of authority in this country. Otherwise, you are a lemming, ready to be led into disaster. The greatest danger to the insiders, is that outsiders might figure that… Read more »
David, nice article, but it only touches the tip of what I am personally experiencing when talking to friends and colleagues. I am part of what is euphemistically referred to as the “working poor”, with three children and a mortgage and am totally familiar with the dread of running out of money before the end of the week; Life for me and many others is about making triage-like decisions as to which bill to postpone, which creditor is slower to react, how to play the bureaucracy so that you use the system of credit management to stave off the inevitable… Read more »
The past decade was dominated by IBEC, with ICTU as second fiddle. The coming decade will be dominated by ICTU, with IBEC as second fiddle. A case of that oxymoron term ‘much the same difference’. Ireland will become another Scotland. Bankrupt, proud, clueless, dependent on money from outside, unprincipled, and making the odd effort to be significant. And no country for young people who want to make a go of things. With the resources controlled by a small group of business men, and a noisy bunch of trade unionist careerists and aligned politicians exploiting the opportunity for all it’s worth.… Read more »
I am realising that the ICTU are in control of the dialog about this crisis now. As much in control of it, as IBEC were in the Binge era. This is a remarkable acheivement. It bodes badly for our intellectual capacity to get out of this mess.
Here is commentary by Nadeem Wayalat concerning the recent UK budget, and efforts by the ConDem Coalition to fix the bankrupt condition of British state finances, as a result of the RBoS bailout and an election budget.
http://www.marketoracle.co.uk/Article23744.html
Now, this matters because it has implications on the value of sterling and also on this mantra of export led growth. Wayalat argues that the ConDems are not fixing anything, and that British borrowing is still out of control.
subscribe.
PIMCO’s Mohamed El-Erian has been remarkably specific in his assertion of Greek default.
Speaking at The Economist’s Buttonwood conference, El-Erian declared Greece destined for default in 3 years time.
El-Erian sees no way Greece can deliver on its 11% fiscal adjustment as it has never happened before.
http://www.businessinsider.com/pimcos-el-erian-says-greece-will-default-in-3-years-2010-10
Recommends an an orderly default …
“Most political societies are divided along lines that are broadly left and right” There’s a notable exception to this, the USA. Both the Democrats and Republicans are right wing for the most part. I agree with Deco that FF is not right wing. They’ve pandered to the unions every bit as much as the Labour Party would have done. The Croke Park agreement was a disaster. A billion needs to be taken out of health and not a penny can be taken out of the 70% that it’s costing in wages. 904 a week on average for a civil servant… Read more »
A compassionate article, well done David. Though, as a public servant, I earn €1,568 per month, that is €392 per week and I’m 18 years in my job! I never believed the Celtic tiger was real, real touches everyone. The Celtic tiger illusion touched the wealthy in our country. I have a huge challenge paying for NAMA, when it is the rich bailing themselves out. Most people on social welfare earn as much as I do per week, what with their dole, rent/mortgage supplement and a medical card. I believe we need a fair, just and equal pain body for… Read more »
If there aren’t protests at the coming budget, then there never will be. Everyone has lots they are unhappy with in this country but where is the rallying point for protest; the gameplan, vision, leader or group that people can put their weight behind. I have never been particularly political although I watched incredulous and with a sense of foreboding (stimulated by DMcW’s articles) as the policies of tax-individualisation and property incentives pushed the Irish population into a situation where two-incomes are required just to get by. Now I’m bursting to get involved yet still feel like a spectator. It… Read more »
[…] How long before the people crack? | David McWilliams. This entry was posted in Irish politics. Bookmark the permalink. ← A Dream for Ireland […]
Ireland is one of the most right wing countries on the planet, anyone who thinks it is remotely to the left needs to think again what ‘left’ consitutes. Public-Private partnership was cosy capitalism, and we see clearly the results of the failure of people to do any homework on the regulator and the financial services sector who were granted carte blanche. The two main political parties are trying to practically outdo one another on the level of cuts required (the so called ‘front loading’ brigade, very brave soldiers of destiny with their massive salaries, pensions, expenses and ‘entitlements’). I think… Read more »
Scotland is in a far healthier position than Ireland, more people on the dole in Irl , than in Scotland, Wales and NI combined!.There are more people out of work in the 26 counties than in Greater London, which has twice our population.Unionists would be insane to join a united Ireland, the equivalent of accepting a blood transfusion from a person with full blown AIDS .
Why do all civil/public servants get tarred with the same brush? The reality is that higher paid civil servants are VERY well paid BUT lower paid civil servants get less than half of the €904 average which is bandied about. Promotion prospects are few and far between in the public service, during the boom there were no bonuses or any of the other perks that the public sector enjoyed. Public servants were sneered at during the boom for staying in their “little” jobs, now they’re vilified because their jobs are relatively secure. Those who do get promoted tohigher levels in… Read more »
“You can call it a party whip or whatever — but I’d be calling it democracy at its best.” Say’s Bobby Alyward, Fianna Fail TD. Bobby was speaking after the committee of which he was a member had slammed the door in the face of our ombudsman Emily O’Reilly when she had raised certain concerns about a scheme Frank “forty gaffs” Fahey had launched below in Galway. Frank you might recall had found himself “lost at sea” and in need of the party whip. The big difference from this story and the one in David’s article is that David’s friend… Read more »
to give you some of my current back ground i am currently on the sick at the moment and have been told because it now looks like a disability that i have that it will take up to six months to sort out what i am entitled to. i have two young kids and my wife works part time in a shop i get 190 euro per week plus her wage to look after us the kids pay the bills ect. this next budget will kill any breathing space that we currently have to survive we are currently paying reduced… Read more »
Using the same percentage across the board is quite obviously inequitable, be it in cuts or taxes or indeed salary increases. It’s obvious that the wealthier someone is, the more of that percentage is essentially waste on their savings, luxury goods, or holidays, and so on. The percentage to the lower earner meanwhile concerns far more basic purchases and will all be spent (or not if it is taken away). Interestingly, even the US was once aware of the basic fact that the richer can and should shoulder a heavier burden. They once has far more tax bands, with up… Read more »
Poverty and….CRACKS…. Best viewed fullscreen, 1200 pixel high http://dl.dropbox.com/u/4914840/cracks.jpg The above picture is a walk by shot that I took on a ‘reconn-mission’ visiting a tiny Irish Island called Gola in Donegal. Geomorphology is not my field of expertise, but I am fascinated by certain rock textures and structures all my life. Cracks appear over time. Some countries experience explosive breakdowns of social cohesion, others a social implosion, the latter is trued for ireland at the moment from a sociology point of view, however, a mix of both is more likely to happen once the dynamic has reached critical mass.… Read more »
Here is a blog I’ve just written, if you are interested, you are welcome to view. I believe this is the way to go!
http://irishminx.blogspot.com/2010/10/live.html
I am/was self employed, had a good wage and plenty of work (I did not work in construction) I borrowed 20k as business loan of one of our two main banks back in 06, things were grand until late 07, by 08 I could not make repayments as work was sporadic, sometimes no work for 3 to 5 weeks on end, I made the simple choice to pay my mortage and forget about the loan until things improved, I am now beginning to see things are not going to improve. The bank won’t be flexible, I told them what do… Read more »
Average weekly wages in public sector include the pay of the bosses, hence it is higher than the average private sector wage. How much would the average private sector wage come out at if it included directors and owners wages?
I wonder at times what are we as in our generation going to tell our kids when they are older and our grandkids how we let this happen. More worrying when they asked what we did about it i fear that we will tell them that we did nothing and we as a generation stood by and let this happen to this country. In my mind if taking to the streets in mass is the begining of a way for the normal ordinary people in this country to force change in the political class and the elite then so be… Read more »
To answer the question posed by David McWilliams:
How long? Not long.
People do crack eventually. The good news is that after you crack there comes a moment of clarity when you see the world for what it really is. When you reach that point nothing can break you because you are afraid of nothing Great Article David. Nice to see a change in tone from the article I read in the the other day in the Sindo from a well known celebrity journalist cheerleeding the cuts. It seems that Milton Friedman still has a lot of influence on these shores and that some people are living in some imaginary glorious past.… Read more »
HOW LONG BEFORE THE PEOPLE CRACK??? I wasn’t going to vote in the next election whenever it comes, but if reverse benchmarking with other European Countries in our own league for the top Civil Servants, as proposed by Mr.Arthur Morgan TD in last Sunday “the Weeks in Politics” becomes part of Sinn Féin strategy to win it, and to save the Country, they not only will have my vote but I’ll guess the votes of thousands of people who think in the same way, and it’s sick and tired of footing the bill. We can save billions through the years… Read more »
Gentelmen and any Ladies that might be present I am afraid that any marches that may be planned or coming generally will not achive anything,They have the best of intentions and are very much the right frame of mind but they do not pose any threat to the goverment. If there was an local election coming up a march may have some effect but I think the time has come for National Strikes where everybody stops work. Civil Disobedience Bycott the banks etc. That is the only way to acheive results I believe. There is a quote from the film… Read more »
After posting my last message I heard Shane Ross talking with Derek Mooney on The Mooney Show saying that the maximum salary in the Public Sector should be 100.000 euro!!!, including the executives of Banks that we have to bail out, and that at the moment are authorized by the Government to paid themselves up to 500.000 euro. And remember that water and a home are basic human rigts and not luxuries that should be taxed by greedy politicians who want to pay their fat salaries with the sweat of other peoples labour. And if we keep quiet and take… Read more »
Hi David I read your blog every week and find it a great source for information about the economic bunglings of our current government. I am compelled to say that Ireland will turn the corner because things will get so crap, they will only be able to get less crap, this is a fairly economical ignorant but optimistic forecast. If we do get out of this, the problems then lies with the current level of rot and unpatriotism that exists within the government and civil service, whether its obscene pensions or salaries, theft through expenses or a lack of accountability… Read more »
I would say that a 10% in social welfare is on the cards, that would save about 2 billion. But we need a further 5 billion in savings to be credible. In January we will need to continue the borrowing and at rates of 6.5% this will be unsustainable we will have to go to the EU/IMF. David made a prediction of them being here before St Patricks day. I would love to be a fly on the wall at Farmleigh, it must be a real struggle for ministers to know that it will be on their watch that we… Read more »
David, To prevent people cracking up, why doesn’t the government sponsor people to emigrate? Why not give potential emigrants who are on the dole, an upfront payment equal to 6 months worth of dole payments upfront to leave the old sod? I know the Spanish government was encouraging immigrants living in Spain who were unemployed to leave Spain, and return home with a “golden parachute” of a few thousand Euros. Its a win-win situation for those who choose to leave. The Government has less people on the dole, and after 6 months the government is financially better off as the… Read more »
If you want to undermine crony capitalism – don’t use socialism – just make sure that they get competition from younger, more agile competitors. The gombeen element in our society needs competition to put them out of business. Socialism should be restricted to supporting those that are genuinely in need of it. Otherwise it will bankrupt the entire society. And then those that need it find there is nothing there. They pay PRSI and find out it does do what it says on the tine, that instead the money is gone on bank bailouts and the whole thing is a… Read more »
[…] source http://www.davidmcwilliams.ie/2010/10/26/how-long-before-the-people-crack […]
Your comment is awaiting moderation. October 26, 2010 at 1:33 pm Poverty and….CRACKS…. Best viewed fullscreen, 1200 pixel high http://dl.dropbox.com/u/4914840/cracks.jpg The above picture is a walk by shot that I took on a ‘reconn-mission’ visiting a tiny Irish Island called Gola in Donegal. Geomorphology is not my field of expertise, but I am fascinated by certain rock textures and structures all my life. Cracks appear over time. Some countries experience explosive breakdowns of social cohesion, others a social implosion, the latter is trued for ireland at the moment from a sociology point of view, however, a mix of both is… Read more »
Hi,
How long before people crack? I cracked up a year ago but I am ok now. I am not looking for sympathy though. Message to all commentators; Stop windbaging and get active!
We are months away from an IMF intervention. Might as well settle your minds on that one and stop worrying. Is is likely that PS salaries will be slashed along with jobs and services by about 25-30% before end of 2011. This country is practically 100% PS or quasi monopoly employees who support the brickies, the shop keepers etc (who laughably refer to themselves of self made entrepreneurs). The remaining few are in FDI, Multinationals and maybe a few thousand in Irish international companies or farms. SO…when the IMF land and do their 30% slash and burn, we can add… Read more »
Martin Luther King, two speeches of relevance to these times.
How long? Not Long! Because no lie shall live forever! The arc of the moral universe is long but it bends towards justice!
http://www.youtube.com/watch?v=TAYITODNvlM
The Urgency of Now!
http://www.youtube.com/watch?v=_j4h3gGYZSk&feature=related
in relation to the IMF coming to the country from some friends of mine who live in latvia they have told me that what happened was totally devistating to the country and has set them back maybe 15 to 20 years economically. and this is from a country that already has a very low wage structure in the civil service the adverage wage is around 400 euro per month for middle management level and in the private sector the adverage industrial wage is around 250 euro per month. we cannot compete with low wage countries and the constant call for… Read more »
Repeat post from last article: Frankly David, I find it incredible when you say: “At end December 2006, household savings were €77bn;” and … “By the end of June 2010, household savings had jumped to €85bn” Even ignoring your GNP %age argument these figures defy logic. Whoever is peddling them must have a hidden agenda. In reality there has been a massive destruction of wealth in Ireland. Perhaps there are a few bulging mattresses but most of boomtime gains were reinvested in rubbish property and bank shares and bank deposits, where they took a ride on the infernal merry-go-round. If… Read more »
Hi Guys see below i believe here is the start of the cracks showing and we have not even got to the budget. many people will say that this is an isolated insident and is not common but to me it shows that people are getting to the point of no return………. A social welfare office was evacuated today after a man doused a counter with a liquid thought to be petrol. The man (50) walked into the office in Ballina, Co Mayo, at 11.45am and poured out the contents of the container. The gardaà and fire brigade were called… Read more »
White. Hot. Anger.
Ten Years:
Greed
Lies
No Governance
No Accountability
No Arrests Clarion call from our host DMcW?
I cannot tolerate any further injustice.
I am disgusted at what I have witnessed in this [my country]in the past 10 years.
Dorothy Jones
Spotted this posted elsewhere From the gradIreland website – “Central Bank & Financial Services Authority of Ireland About the organisation The Central Bank of Ireland is a dynamic, multi faceted organisation at the heart of Ireland’s financial system. Amongst other things the Central Bank has responsibility for monetary policy, financial stability, economic policy, the prudential supervision of the financial health and stability of Irish financial services institutions and consumer protection. The organisation is currently going through a period of significant change and expansion, in particular in the critical area of Financial Services Regulation. ” Wonder what a FF ministers job… Read more »
David.
The insiders are busy busy preserving their wealth power and future earnings. So the economy and its wealth yield is on hold at the mo while they play musical chairs.
To all outsiders I say this, do not despair get sussed on how the economy is rigged and run and then you will feel less fearful and in the dark and more empowered.
Ooops, sorry. Just watching O’Dea/Owen on #vinB now. Here it is:
http://www.youtube.com/watch?v=9R89oERKCaU&feature=player_embedded
The Prime Minister of Norway one of the richest countries in the world, with one of the best social services in the world, earns the equivalent of 120.000 euro and nobody in the Public Sector earns more than him. At that rate they can have four politicians, for the price that all of us have to pay, for one Irish politician with no ideas, vision or leadership qualities. And for sure they don’t have to pay for “golden handshakes” either. No wonder we are broke, and the adjustment went from 7 billon to 15 billon in less than a year!!!… Read more »