Advisors.ie

I saw a t-shirt once that had a picture of a pyramid and it said ‘slavery, it gets sh1t done’. While I don’t agree with enslaving anybody, it makes a point that sometimes the unpalatable is also the most practical.

Which is why when I hear people bemoan how we are enslaving future generations because of the bank bailout or promissory note deal I secretly die inside, we are doing that already. The Economic and Fiscal Outlook of 2013 (if you look it up check out table 12) shows that irrespective of banks that we’d be short to the tune of €40bn between 2012 and 2015.

We’d be enslaving them either way, in order to survive the here and now, were it a few thousand years ago this is akin (financially) to cannibalism. Why do we conveniently lie to ourselves that some debts, like those run up by running the country badly in general, are acceptable to pass on to our kids, but other debts like bank debt are not ok?

That is why we need austerity, it is to save us from ourselves in order to preserve fair conditions for the next generation. To morph an American Indian saying ‘we don’t inherit the economy from our ancestors, we borrow it from our children’.

The perpetrators are ourselves, the victims are those too young to protect themselves from our whims. The most shameful thing of all is that we dress it up as being morally acceptable at all, on any facet.

Even the headlines blur the reality, a recent one was that Ireland has paid 42% of the cost of the European banking crisis stating that each person was weighed down to the tune of €9,000 for our banking crisis. This was because total cost was laid out as if it was all debt only.

But the actual ‘debt’ portion of the €64 billion wasted on bank bailouts is made up of a €20bn investment from the National Pension Reserve Fund and just over €43bn of actual loans or debt.

Of that debt almost €31bn was the promissory notes (dreamt up out of thin air) and the rest was just under €13bn of borrowed cash from the markets. So the rage focuses on banks only, overlooking that we were bunched with or without them.

With Croke Park 2 done (and that it’s a number two is relevant in more ways than one) it is once again time for the blinds on sense to come down, no job cuts allowed, that sacred cow only exists in public service, any private company faced with the challenges the state now faces would have sacked 20% of it’s staff already.

And within this there are other fallacies worth of exposure. No statistician has ever placed an actual value on security of tenure (inability to get fired) or excellent pensions in the public sector when comparing them to the private sector. These are valuable benefits.

To overlook something that hasn’t been measured is difficult, but to ignore it is obscene. In particular when the ESRI and CSO both show that comparatively people are better off working for the state than they are in private enterprise.

If there is no value to security of tenure then why is there such a focus on ‘no job cuts’? The giant spoof has no external criticism because those most suited to critique it are often beneficiaries of the same system, it’s easier to avoid such a contentious issue altogether.

And all the while we are told austerity doesn’t work. Sadly it does, that is why people do it, Governments don’t do austerity for the craic. That is why Standard and Poors Chief Economist Jean Michelle Six said at a conference in Dublin this week that Ireland is improving. ‘Austerity is producing positive results, but it takes time, because getting out of debt takes longer than getting into it’.

Standard & Poors rate our debt and our nation in terms of creditworthiness. What they say actually counts. We have improved competitiveness, a better balance of trade, higher exports, and sadly high unemployment. The latter is part of rebalancing, and while it serves as zero consolation to people out of work, what I can say is that a healthier economy will solve that, higher spending will only alleviate short term symptoms.

At some point we need a sincere national conversation about what we do and don’t want from the state and about the kind of nation we wish to pass on to future generations. Until that day, keep the chin up, and try not to let a temporary knock back turn into a permanent mindset, we’ll bounce back because like slavery, austerity gets $h1t done.

(this article appeared in the Irish Sun on Sunday 03/03/13)