Enda Kenny would cut a dash in a pair of bottle-green, high-waist parallels and a snugly fitted Bay City Rollers bomber jacket. Or maybe a Robin Gibb, Bee Gees one-piece with the bell-bottom flares, up which you could hide a six-pack?
Make no mistake about it: we are back in the 1970s. Whether your weakness is glam rock, outré disco, prog rock or Leo Sayer, the soundtrack matches side-burns, microphone Afros, catsuits and Babycham.
Close your eyes, forget the Toyota Prius, the iPhone, Facebook and Twitter. Sit back and listen to the news this week – the soundtrack of the seventies.
Let’s start with the breaking down of national pay bargaining negotiations, then move on to the threat of all-out nationwide transport strikes delivered by leftist men with beards, and then consider a shaky unstable minority government which is charged to deal with all the industrial unrest.
Once you have digested that, think further about still nationalised banks not extending credit and our biggest neighbour possibly going its own pre-EEC way? Back to 1973 anyone?
In many ways, the Luas dispute is simply venting in public what has been happening privately and under the radar for the past year.
CSO statistics reveal that in 2011, in the depths of recession, there were just 3,695 days lost to strike action. By last year, that figure had risen to more than 32,000 days. This is likely to continue.
It’s likely that wages are going to rise in the years ahead and this will prompt a titanic struggle between workers and employers, which could easily spill over into wildcat strikes and significant industrial dispute, starting in the public sector and extending out to the private sector.
Does this mean that Ireland is about to experience a significant rise in wages over the course of the next few years?
Yes, I believe that will happen, not because I have any insider knowledge, but because this is how economies behave and this is how humans behave. Expect the trade unions and workers very soon to demand their share of the pie.
And, naturally, if a government doesn’t get to grips with expenses like housing costs, workers will clearly demand more wages.
Or if a government increases taxes on workers, it means their take-home pay is smaller and, at the first chance, they will try to get some of their share back.
Obviously, the more a government or political party continues to talk about a recovery, the more it is encouraging this process.
All this talk of the recovery gives workers the permission to push for more wages because they can say, “If the economy is so strong, why don’t I get a few extra quid?”
As unemployment falls, wage demands rise. It’s called the Phillips Curve in economics and the relationship is as old as the hills.
In a recession, we are too scared to look for higher wages because we know there is always someone on the dole queue to take our job. Over time, as the dole queues fall, this threat diminishes and workers move to get higher pay. This is the cycle.
The implication of this is that the country is facing a summer of discontent as workers agitate, peacefully at first, for higher wages.
The next Taoiseach will have to be able to deal with this new cycle. The economic cycle is turning and industrial relations could be very messy, particularly if workers try to claw back wage increases that they believe were postponed in the recession.
Now consider the next government and how you think it will deal with an outbreak of industrial unrest. Remember, this is a government that is implicitly, if not explicitly, based on delivering favours. Fine Gael knows that it will be hammered in the next election, so it will give anything to every vested interest rather than go to the people again.
Think now about the Independents. They are in the extractive business. They are not thinking about the national interest at all, that is why they are Independent. They are there to extract “rent” for their followers.
Although some may be good people, they are there to deliver more for their own narrow electorate. This means, given a fixed budget, that they have to be successful in extorting cash from other people for the benefit of their own, no matter how “nationally incoherent” any giveaways are.
This expression “nationally incoherent” is one we should dwell on, because it’s not just the Independents: Fianna Fáil is at the same “nationally incoherent” game.
This government will not look and smell like a real government, but will be more like a position paper for the next election – a launch pad, if you will.
Fianna Fáil and the Independents will pull the plug when it suits them and, given the primacy of party politics over national interest on display the past few weeks, the political strategy of the opposition has to be to make things as unpleasant as possible for the new government for as long as they can bear it.
Once we reach the point where things are unbearable, the tactic will be to pull the plug, go to the polls and blame Fine Gael for everything.
After all, the thinking is that if Enda Kenny’s Fine Gael couldn’t win with the economy growing at 6pc, what hope do they have when we are in the middle of mass industrial unrest?
Are we in for a summer of discontent? I fear so.
Do we have a political structure that can deal with and manage the industrial fallout? I fear not.
Welcome to the 1970s, 21st century-style.
Irish Independent
There is indeed a close relationship between inflation and wages, which is all that the ‘’Phillips Curve’’ claims. But it is not predictive. There are many other real factors affecting wages such as technology changes, union power, demographics, taxation etc. But accepting that wages are doomed to chase inflation factors such as too-high housing prices, is a futile exercise. Housing prices will have to be tackled separately not accommodated as a natural law of economics. To counter the growing popularity of the ‘’Phillips Curve’’ among political theorists in America during the inflationary ‘70s and ‘80s Milton Freedman argued that no… Read more »
So what you are saying Pat, is that any theory only explains a particular situation at any given point in time. A theory becomes popular to a particular political group in power but because of the infinitesimal variables at any point in time cannot predict anything?
Ok boss :-)
Subscribe.
+ 1
That is a significant point (no appetite for risk taking) with a large relevance to a key underlying factor (housing provision and cost) there, Mike.
I will come back to this later, if I get a chance.
I actually do not think that Independent TDs are any worse than party political machines when it comes to being extractive. Everytime that the FG political machine and it’s ILP bolt-on are in power, a certain media oligarch seems to “extract” very lucrative deals. Pothole fixing in Kerry is cheap compared to the SiteServ write down courtesy of Ireland’s most scandal prone bank. In fact one could claim that there is societal benefit from better infrastructure in the Atlantic counties. Cheap loans to billionaires who avoid taxes, and then subsidize “bread&circuses” machines like the FAI, is the essence of what… Read more »
When it comes to being extractive the Pee Dees win hands down. The reverse Robin Hood party. Good riddance.
Shane Ross correctly called them the political wing of IBEC.
Back to the Future 2.
I’m seeing a theme here.
The big “potential ” difference now is that the technology exists to automate most things at an affordable cost.
Driverless trains and trams are no problem.
Teachers may take a little longer but rest assured it’s a work in progress.
Maybe “Future World” might be more apt.
The country is plagued by quangos, it’s fair to say. Another legacy from the Bertie era. SF, FF and all the Indos are very keen to abolish the Water Board. Sooooooooooooooo Lads why nit scrap a few more state “Boards”. Let’s see what ye are made of now. Ye have a once in a lifetime opportunity to make real changes, to take on the many special interest groups that are screwing us all. Here’s one for you to start with. How about indicting Bertie and then we’ll know you’re not just a bunch of empty vessels making a lot of… Read more »
Advice on conducting the affairs of a Republic. THE WARNING: In his 1796 Farewell address, George Washington, the First President of the United States, said: “Observe good faith and justice toward all nations. Cultivate peace and harmony with all. … Against the insidious wiles of foreign influence the jealousy of a free people ought to be constantly awake, since history and experience prove that foreign influence is one of the most baneful foes of republican government. The great rule of conduct for us in regard to foreign nations is, in extending our commercial relations, to have with them as little… Read more »
Being within the EURO leads to financial strife and loss of financial sovereignty.
Being within the EU leads to loss of political sovereignty.
Having a proportional representation vote leads to a hung parliament. Better a first past the post preferential ballot system.
USA want the status quo as a single European government is easier to control than several sovereign states acting in their own self interest.
http://www.paulcraigroberts.org/2016/04/21/us-assaults-british-sovereignty-paul-craig-roberts/
Strife is occurring around the world as the Western Industrial Democracies are under attack in many ways. The importation of sharia law to be impose in neighbourhood after neighbourhood that advocate social policies that are many times against the laws of the country. The problem stems from radicals being allowed to operate with impunity. The schengen treaty Has already been put aside in Europe.
https://en.wikipedia.org/wiki/Schengen_Agreement
http://www.judicialwatch.org/blog/2016/04/u-s-gives-680000-green-cards-to-migrants-from-muslim-nations/
City of London elections
https://www.youtube.com/watch?v=EKanfsl2Et8
Here is a problem in my own back yard.
http://ep.yimg.com/ty/cdn/realityzone/NTKcanadaSalmonConfidentiaFishFarms.html
“Feast your eyes on the carnage that is to come…and take special notice of the top 3 banks who are about to be clotheslined!”
“Don’t take my word for it! Just check this chart from the Atlanta Fed giving their US GDP forecast(HT Mike Maloney):”
“I believe, that the globalists have wanted this to be the “final collapse” to end all collapses. They want it to be so bad, that the world literally comes crawling to them to “fix it”, no matter how draconian and orwellian that “fix” may be.”
http://thewealthwatchman.com/is-this-the-reason-why-yellen-president-obama-are-having-so-many-secret-meetings/
Wake up ! Wake up ! Wake up ! Wake up all yee’s Junkies of Chomsky, Stiglitz, Larry Sanders, Donald Trump, & all other decoys from what the real truth ; Cold Turkey in the form of “Bail-ins” coming ur way soon ; http://www.anonymousconservative.com/blog/bail-ins-are-the-new-black/ Excerpt ; Entering into 2016, all members of the European Union (EU) were required by law to have bail-in legislation on their books in preparation for the next potential crisis that in previous times would have resulted in a taxpayer funded bailout… And on April 10 2016, it appears that these new rules have come not… Read more »
Better to have many small unions in private sector ; More chances then that union is truly representative of the wages & conditions of lowly paid employees. Presently, the unions do not care about the lowly paid employees. Important that unions are not manipulated from within by pernicious interests : 1. selfish Biz interests ; Local & Foreign 2. Socialist-Communist-Facist agenda interests ; Local & Foreign Government interference — in particular situations — is the exercise of unfair activity by the State, & thus the State is already interfering as a Socialist-Communist-Facist interest. 3. selfish Libertarian interests ; Local &… Read more »
Not surprisingly it looks as though the war on workers is being ramped up in the national media ahead of industrial action – now that is as old as the hills. It is essential that people do their own research especially when the business union propaganda wagon gets up and running, churning out ‘economic-speak’ to control the masses. The ‘Phillips curve’ actually shows the relationship between unemployment and inflation. Wage increases are the assumed cause of inflation in that model. And if you believe that wage increases lead to inflation then the business lobby propaganda has been tremendously successful; and… Read more »
The real problem with “bail in” legislation is that it’s like removing the safeties.
It means bank and politicians can behave even more irresponsibly without sanction.
BECAUSE handing Joe Citizen the bill is nowa lot eeasier.
We do indeed live in interesting times.
Accursed are we!
The central banjs have failed us because the politicians have failed us.
While the printing presses were/are running, the US and France to name but two should have been getting their econimic and budgetary houses in order.
Resukt bail in legislation and a pending busy fan.
David The madness of the seventies was something else. Traffic jams in O’Connell St. at 2am every morning. If 400 workers from a workforce of 600,turned up on any given day, it was considered acceptable – partly due to a 6 day sick benefit scheme from the state competing with a 5 day working week. Two weeks sick leave on a doctor’s note normally meant that amount time on the Costa del Sol or in some cases, some time to double gob in the black. The property ladder was rocket propelled – a punitive mortgage at 14% would morph into… Read more »
Looking back to 2008.
The ECB was seriously annoyed at Ireland for extending the deposit guarantee.
Their plan might well have been a bail in.
David was in favour of the guarantee and has always defended it, in principle.
So ECB were never going to burn the bondholders. Instead they were going toburn the deposit holders
And that’s the way it’s going to be the next time there is a run on a bank.
They have a cheek and governments will fall if it happens but not before the money is gone!
They are trying to abolish the 500 Euro note.
Has anyone else noticed recently that ATM’s dispense 20 Euro notes instead of 50 Euro notes?
They’re now planning for NIRP and making it difficult for the bigger players to stash cash instead.
Deal with the devil and the devil wants his due.
http://www.zerohedge.com/news/2016-04-21/eu%E2%80%99s-refugee-dilemma-growing-panic-how-change-terms-deal-devil
Obama not given due respect as it appears he was summoned to Saudi Arabia.
http://www.cnn.com/2016/04/20/politics/obama-saudi-arabia-tensions/index.html
The Japanese equivalent of the “plunge Protection Team” is on steroids and now buying up the Japanese stock market. all in the idea that this will increase business confidence. What is not understood by me is how this will improve the business model of anything except for those currently invested in the stock market who go along for the ride will receive a wealth effect. how this improves consumption and production and increases employment beats me??
http://www.zerohedge.com/news/2016-04-20/why-stocks-rebounded-overnight-goldman-expects-boj-double-its-equity-purchases-soon-
If we used proper money rather than the fraudulent paper charade that we do there would be no debate about rising wages being required. In fact there would be a continuous subtle rise in the purchase power of the steady wage packet. Stable money leads to gentle deflation and a lowering of costs and prices as all are able to benefit in the increases in efficiency and production of a properly functioning economy. Stable money rids us of the so called economic cycle which is a result of the inflationary expansion of the money supply practiced today in spades to… Read more »
The battle is for people to survive. Just having a job will be fine. Never mind asking for more wages.
https://www.dollarvigilante.com/blog/2016/04/23/ticking-timebomb-americans-horrible-financial-shape-just-prior-next-crisis.html
Perhaps David you might consider an article on how technology is changing the economic landscape of the world.
Perhaps a new branch of economic ideology is required.
How the big corporations manipulate the stocks prices and earnings by buying back their own shares using historically cheap money. The executives pay themselves bonuses because the share prices rose while the investor gets a rising stock price. However the actual earning have not increased and the company is overloaded with more debt. It is a recipe for a near future stock drop where the investor gets wiped out even as the corporate insiders make off like bandits. It is a financial manipulation where the 99% get skinned because of the artificially low interest rates and cheap money because of… Read more »
-Anyways, it is very wrong that any salary increases be given to the Civil Service. They are an albatross around our neck as it is. Of course, there are a great many fine individuals who are Civil Servants. But, as a body they should NOT be getting more than the typical salary of their equivalent role in the Private Sector. Actually, they should be getting less. And, their jobs should not be for more than 10 years or so. Every citizen should get to be a Civil Servant by a certain age. It should be designed to be national service.… Read more »
I get so sick of hearing it is all the fault of the “Fed”. Most of the world does not have a Fed” and if the “Fed” was abolished the problem would still continue. I do think the problem is greater than that. Personally, I think that this idea of minimal government IS the problem. Years ago Government, throughout the world, had strong legislation to prevent this from happening but now all that has been repealed in the name of the “freedom for the Market”. If politicians had the guts to pass further legislation it all could be stopped but… Read more »