The Centre Cannot Hold

June 12, 2017

The shock of British Conservative losses clearly shows the distrust of the electorate in regard to dictum that politicians are there to serve the needs of the people not the banks.

People are revolting against those political parties and politicians in league with the banks and financial services industry who loot people through austerity and no taxes for the rich.

People want ownership of their democracy back from politicians who troll for the rich while public services are looted through austerity. The middle class disappears leaving an increasing banana republic divide between rich and poor.

Following bailout money was printed out of nothing given to the banks and financial institutions as a reward for driving financial collapse!

The rich feasted on a frenzy of investment into stocks and shares and bonds it was hoped would also stoke economic activity. This has created the irony that since 2010 the books of many large corporations show slowing economic activity while their stock prices through artificial printing of money have since gone through the roof!

A corollary of this was austerity which sought to make the poor pay for losses stoked up by the rich.

With austerity and asset support of the rich in every feasible way possible through globalisation, the increasing power of the financial sector sought new speculative interests to assert its growing power.

Under the flag of austerity the financial sector has brought pressure to bear on politicians under its control and spell to privatise public services everywhere from healthcare to education to water supply hoping such utilities could be laundered into privatised assets to benefit the share speculators in large financial institutions.

Austerity made asset stripping of public services and asset stripping of public ownership of residential housing, health care and education the norm. Lack of public housing programmes allowed speculators to drive up property prices to unconscionable levels.

Further erosion of the middle class is evidenced in the lack of affordable public housing with the control of residential property passing into the hands of rich property speculators and vulture funds to further enslave the young whose ability and right to hold private property is under challenge.

An alliance between right-wing government parties, the banks and financial institutions and rich property speculators and developers drove property prices to the bubble levels they are today.

The crash of 2008 being just a minor blip on such policies that continue to this day with homelessness and hospital trolleys the new norm while the economy becomes laundered into that which has more in common with a banana republic than a modern democracy.

Clearly young people are voting against centre right parties whose collusion with the financial centre has brought about fewer full-time jobs, zero hour contracts, unaffordable and zero opportunity to purchase property to start a family home, lack of decent health care and a collapsing and unaffordable health system.

The current leader of the Fianna Fail opposition, on the election of Taoiseach in waiting, Leo Varadkar,  stated Fine Gael needs to do more on housing and homelessness and health, while his confidence and supply agreement and support of Fine Gael joins him at the hip with Fine Gael against a public programme of public housing.

Collectively they are yoked together by the yoke of Fiscal space an imperative imposed on them by Europe. Arguably in effect these politicians are powerless pretenders offering us policies that claim far more than they can deliver.

According to Philip Ryan Sun Independent, 11 June, p5 ” TD’s came under fire from the public after the last budget when their pay was to increase by €2,700 in April. Now they will get an approx €5000 on top of this which would restore 98pc of the salary cuts they received throughout the recession”

Such political hypocrisy has become the new norm. Further examples of political hypocrisy are evidenced in the collective failures of Simon Harris, Simon Coveney and Leo Varadkar to offer mere band-aid policies to end our housing and health crisis. Many members of such right-wing parties have vested interest in buy to let properties and own a portfolio of residential housing stock. They have no interest in bursting the housing bubble or ending homelessness.

While it would be easy to declare the need for TD’s as unnecessary and obsolete in particular ministries for Health, Homelessness and Education, as they have no power to bring about policies people require, as ‘Fiscal Space’ governed by Europe and Ireland’s banks, we must retain the hope that some politicians will emerge from young voters with enough intelligence, determination and ability to prevent Ireland’s slide into Banana Republic mode.

Both Fine Gael and Fianna Fail are signed up to the odious control of our fiscal sector by Europe, both are signed up to the austerity mantra of reducing our public sector including reduced pay for new entrants. Both are signed up to reduced taxes on the wealthiest including on those working in the financial sector.

Woven into the spider’s web are bailouts of the financial sector shouldered by weak politicians lacking in public spirit and enthralled by the financial sector.

Failures in the euro zone have shown how influenced the euro zone is by its crippled dependency on the banking sector. Most of the banking sector in Italy is insolvent. Spain has just seen Santander absorb Banco Popular previously one of Spain’s largest banks.

Spain’s Banco Popular got taken over by Santander for the sum of one euro. It had approx 37 bn in toxic loans on its books.

Some shareholders will get hit but the bulk of its toxic loans will remain toxic but Santander will attempt to hide them.

Popular had its share price nose dive recently on foot of bad lending practices and losses last year of 3bn euro.

Italy is filled with banks on the verge of collapse without a Santander to bail them out.

Part 11

In our banking sector we face the imminent sale of a 25% of AIB.

In Budget 2014 Noonan changed the law to prevent insolvent institutions setting 50% of their previous losses as DTA or deferred tax asset against future tax charges, to 100%.

This could mean AIB will not be required to pay a penny tax out as far as 2050.

In a sound bite heralding the sale Noonan praised the offloading to the private sector of the bank compared to its retention as a public Bank that could be subject to political interference.

Leaving aside the raft of political appointments to the banks such as Dick Spring or Alan Dukes or the lack of regulatory laws in Ireland or the lack of any supervision whatsoever.

Consider the political boosting of property bubbles that led to collapse.

Consider the range of bubble inducing legislation over the recent while including first time buyer grants that have helped inflate a toxic bubble in our property market once again.

With such evidence we need not worry that retaining AIB as an Irish Public Bank could damage Irish taxpayers.

The evidence is clear there is far more likely risk of toxic involvement of the state in the private banking system than there ever could be in a public bank.

So what would a public Bank be like? Consider the operation of the Bank of North Dakota.

The many benefits of this bank are that profits are returned to the state. It can support a municipal and public housing programme. It’s mandate is to support communities rather than the black hole of shareholders out for their own profit.

It can be regulated and controlled in a manner that existed prior to 1994 where deregulation of the banking sector began in earnest.

What is Noonan doing instead?

The bank will pay No corporation tax for 30 years. We have a housing emergency in Ireland where 3bn from the sale of AIB needs to be invested in an urgent municipal housing programme to end the growing scandal of homelessness and patients on trolleys in hospital wards.

The sale will cost taxpayers millions in lost revenues as the bank returns to profit. It has recently provided dividends for the state a large proportion of which will be lost on the sale.

Another reason not to sell is Brexit which will put severe stress on our economy.

We could do with a bank that might be a solution to help our economy rather than exacerbate a broken economy.

It makes no sense to pay down 3bn against our overall debt levels of which this is a drop in the ocean.

It is ludicrous that 3bn if this is raised is sent into a black hole that makes no difference except an Exchequer loss that is sent into the black hole of Europe’s financial sector evidenced in the Santander Spanish and Italian debacle that could be better spent on emergency capital projects that are much-needed. Nor have I mentioned Greece.

A public bank will give us greater leverage in negotiations over Brexit. Noonan disgracefully got us a poor deal (no deal) on renegotiating our bailout debt. He defended bondholders against the public interest. He welcomed in vulture funds to Ireland and rolled out the carpet of tax-free perks for speculative interests. Tax payers and the rights of the people of Ireland were jettisoned through incompetent handling of our financial crisis. It looks like Brexit will turn out an even bigger mess.

We need to jettison Europe and negotiate our own Iexit from Europe. We should be looking to negotiate a new united Ireland with our friends in NI with the view to becoming an all Ireland commonwealth partner with the UK, Scotland and Wales.

Protecting social services, health and education should inform our negotiations with the EU and UK as we move away from the EU which has dismally failed to live up to its expectations, but instead has become a toxic and Orwellian Black Hole dooming this island to homelessness, falling standards in social services, education and health care, such standards are about to get a lot worse.

There will be no bailouts of the public sector similar to the bailouts it provided our financial sector to allow it to give perks such as the recent €5000 our TD’s awarded to themselves to keep themselves sweet.

On the one hand Irish taxpayers get to raise €3bn for our bailout lenders, on the other Irish investors in such shares can get severely burned in a Brexit downturn.

There is of course the loss to Ireland’s taxpayers of a public bank that could be managed to support the needs of Irish taxpayers rather than the requirements of looting vulture funds and asset strippers or at best blind investors who are cogs in the machine that is taking us nowhere.


till again.



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