Tomorrow will see former Galway Mayor and Galway West TD Michael D Higgins become the ninth president of Ireland. It will be a proud day for everyone from the city and county he has called home for the last 50 years.
The lead up to the inauguration has led Insider to consider some of the values Michael D espouses; his idea that ‘The future is unwritten and we should never accept as inevitable anything that authority presents to us as so’; the need to renew the Republic; a politics based on citizenship and people first; and equality for all.
You will have noticed that the word ‘economics’ is absent from the above, but that does not mean Michael D’s values have no place in Irish and EU economics.
If the values of people first and equality were held to, ordinary citizens would not be made shoulder the burden of the economic collapse and bondholders would be subjected to the harsh side of their beloved capitalism - ie, they would have to be burned when an investment did not work out.
Think about it, it happens in all other walks of life - from the bookies’ office to setting up your own business. If you fail and things do not work out, you lose. As such bondholders should NOT be given any special treatment. Capitalism should not have exceptions if we are all meant to be subject to it.
A new economic system?
It is far, far too easy to be pessimistic these days. The State is set for another savage Budget; we are still a ward of the EU/IMF/ECB; unlike the unruly Greeks and the in-denial Italians, Ireland does what it is told, but still has to suffer for it; across Europe the Euro-zone debt crisis continues and there seems no solution in sight.
However, taking Michael D’s ‘The future is unwritten’ dictum, we should not believe that no solution will ever be found. It is obvious the solution lies in the creation of a new financial system, one that is responsible to people and governments; not one which is so powerful that it dictates how people and governments conduct themselves.
So what are the problems in creating such a system? Unfortunately they are many.
For the second time in 80 years, we have had a global crisis of capitalism that has played havoc in the West. The kind of capitalism that caused the Wall Street Crash of 1929 and led to The Depression in the US and played a role in the rise of the far right in Europe in the 1930s, was unregulated, free market, laissez-faire capitalism - where the market dictates all, no intervention is permitted, and spending and lending is wild and rampant. Sound familiar?
In the US in the 1930s and in Europe after WWII, political leaders realised this kind of Capitalism had failed and could not be permitted to return. In response leaders such as Franklin D Roosevelt in the USA brought in the New Deal between 1933 and 1936 while in Europe there was the creation of the British Welfare State and the Scandinavian economic model from the late 1940s.
The emphasis was on creating the environment where business could grow and develop and where the fruits of economic success were attempted to be spread around as much as possible in order to give people better welfare, better prospects, and meaningful employment so they could make something of their lives and contribute back to the State.
Entrepreneurship was encouraged but also the markets were restrained and government intervention took place in order to prevent recklessness, over inflation, and overheating. It was still Capitalism, but where its viscous side was kept in check by a more socially conscious ideology.
However with the ascension to power of Margaret Thatcher in 1979 and Ronald Reagan in 1980, the regulated capitalism and the welfare state were comprehensively dismantled, discarded, and demonised. In their place was installed unregulated, free market, laissez-faire capitalism, and it became the ideology of a generation, a holy political creed to which all heads bowed. This was how the world works, we were told. This system was here to stay.
Then came September 2008.
For the second time free market, laissez-faire capitalism imploded and the crisis was every bit at catastrophic as 1929. We are living with the legacy of its implosion, and by extension the legacy of Thatcherism and Reaganomics.
To misquote Oscar Wilde, to have let this happen once was a misfortune; to let it happen again looks like carelessness.
Impediments to progress
Free market, laissez-faire capitalism is a failure. It has failed twice with devastating consequences. The lesson we should learn from both 1929 and today is that its implosions are too awful to be worth allowing such a system of extreme boom-bust, boom-bust rise again.
This, you would think is obvious. However Insider believes the main debate in business and financial circles is about how to get everything - the globalisation agenda, the noughties boom times (the and cheap credit and greed which fuelled them ) - back up and running again. Business as usual, if you will.
Another consideration is the prevarication and bewilderment over how to deal with the Euro zone debt crisis. Yes there are problems with rich states v poor states, national politics taking precedence over EU wide welfare, etc, but there is, it seems to Insider, another far deeper problem, one which is the main obstacle to finding a solution.
There is no one, in any of the cabinets across Europe, capable of articulating brilliant, bold, imaginative ideas that will become actions in government and give the public hope. We have the misfortune of having as our leaders the most uninspiring generation of politicians in living memory.
Europe’s real leaders - Nicolas Sarkozy and Angela Merkel - also fit this bill. Yes they may have made Time’s 100 list of 2011, but note the verdicts - Sarkozy for supporting the Libyan revolution; Merkel as a German leader, not a European one. Mention of playing a decisive role in helping the EU out of its economic mess is absent for Sarkozy and is barely mentioned regarding Merkel.
Looking towards home, well if you saw Crisis: Inside The Cowen Government on RTÉ on Monday, you will have had your impression of an incompetent at the Taoiseach’s office and a reckless spoofer in Finance well and truly confirmed. And as for the rest of that government? Remember the Spitting Image sketch of the waiter asking Margaret Thatcher, having dinner with her cabinet, about the vegetables, to which she replies “They’ll have the same”?
The other problem is that the current generation of politicians (Irish and EU ) came of age when Thatcherism and Reaganomics were the dominant ideology and they rose to their positions of prominence and achieved high office when free market, laissez-faire capitalism was the holy creed. A such they cannot see outside this box and cannot conceive of another system. They are prisoners to their past and to their own ideological history.
There are of course many vested interests against introducing any new system. The higher up you are the more financially comfortable, the less exposed you are to the crisis of capitalism. Witness Silvio Berlusconi’s recent “but the restaurants are all full” response to the economic crisis his country is facing.
But the lesson of post-1929 and the solution that is screaming out at us for 2011 is that a new system is needed - one in which the markets do not dictate political decisions or the fate of nations. And yet, missing from all solutions put forward is a readiness to stimulate economic recovery, growth, and employment in Ireland, Greece, and across the EU, and any talk of finding fresh ways to manage national and international finance.
In Ireland we are set to face into another savage Budget. What little money we can save, we will. It will not go into spending as that is something we cannot afford to do. And yet, spending is the thing that will save jobs, stimulate growth, and keep businesses going. Austerity does not solve an economic crisis, it makes it worse, it prolongs it, but yet, across the EU that does not dawn on our politicians.
Speaking for the people?
Insider has little faith in politicians. I do not know what the future of the Euro is. What he does know is that we need what the outspoken financial commentator Max Keiser calls “independence from banking terrorists”, and people who can, at the highest level, articulate the things that need to be said on behalf of the ordinary citizen, things which we will not hear from the Dáil or EU leaders.
President Higgins, in his new office as Uachtarán na hÉireann, can do nothing to save or create jobs; he cannot fix our imploded economy, or play any role in solving the Euro debt crisis.
However he is a born orator and one who can mix anger and eloquence when he speaks. It is this quality he needs to use to the full over the coming months and years.
The least the people of this State need is a politician who can empathise with us; vocalise our anger, fears, and concerns; sum up our frustrations; and articulate a vision for what needs to happen in the future. It is not a lot, but it can give hope.
If President Higgins can be the one politician and public person who will truly live up to his ideas and his vision of the presidency, and is seen to stand on the national and international stage and say, ‘A better future is not only possible, but mandatory, and it can be achieved’, and that yes, people must come before profit, the markets, golden circles, and politics, he will certainly have done the State a valuable service.
Insider has little faith in politicians, but he is willing to give the benefit of the doubt to Michael D. I just hope he does not shirk this responsibility.