The Chocolate Eclair Budget
October 12, 2017
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The Backbone
Rising inflation and rising public utility charges will instantly erode any gains made by anyone in the budget. But most people when the rises of €3 – €5 come in April 2018 should be able to afford a box of chocolate eclairs from their local supermarket.
But TD’s will gain approx €70 increase their rises come in Jan 2018.
The budget has no more backbone than a chocolate eclair.(1)
“Then-Assistant Secretary of the Navy Theodore Roosevelt got creative when he likened President William McKinley’s scruples (or the lack thereof) to a pastry: “He [McKinley] has no more backbone than a chocolate éclair.”
Here in Ireland we are in the midst of McKinley type politics with governing parties signed up to do nothing at most or as little as possible to resolve the deepening crisis in our health and property crisis.
In response to rules in 2012 brought in by Joan Burton recovering at present from her failed efforts to imprison water charge protesters, charges thrown out by the courts, Finance Minister Pascal O Donoghue has stated such rules were bonkers eg discriminating against women who took time off to care for the elderly, in so doing the state a great service:
“”The advice I have available to me is that if we were to look to try to rectify this issue in one move in a single Budget, it would cost hundreds of millions of euro for me to do,” he added.”
Vacillation and kicking the can into the future.
In his budget speech O Donoghue in his introduction made a reference to the word ‘Compact’. Most people would miss the reference (2): This a nod to our European budget masters. They make sure we are not investing away ‘unnecessarily’ our Pension funds or worse issuing bonds to finance any large-scale procurement programmes to build housing and hospitals.
Fiscal compact defines the parameters of our budget.
Coming in as number 3 in our budgets largest spend is the amount set aside to feed our insatiable debt of circa €200bn mostly gifted to us in bailout during a time when there were no cheerleaders visiting Ireland to tell us how Europe would come to our rescue and share our burden. Now we have frequent visitors from the EU commission and European parliament to express solidarity with us!
Keeping budget deficits under control by failing to tax the rich and corporate Ireland in a time of national emergency and a housing crisis is our obeisant poodle politics at its most compliant and obsequiously subservient to our European controllers.
Our colonial past combined with a culture of authoritarianism within the Catholic Church has made it difficult for us to think independently as a nation in spite of rebellious artists and writers.
But we live in a time of massive genuflection to those who control our economy from Brussels.
Irexit is simple off the table as a political discourse and topic of debate especially on state subvented RTE….Getting back to our subject:
By way of comparison President Herbert Clark Hoover (August 10, 1874 – October 20, 1964) was an American engineer, businessman, and politician who served as the 31st President of the United States from 1929 to 1933 during the Great Depression. made many mistakes in reacting to the Great Depression eg
“The Smoot-Hawley Tariff Act, for instance, which Hoover signed reluctantly, raised tariffs on thousands of imported goods and initiated a trade war between the United States and Europe, thereby exacerbating the global economic downturn.” but he did achieve the following:
“The Federal Home Loan Bank Act attempted to provide incentives for new home construction and addressed the struggling housing sector. The Revenue Act of 1932 increased corporate and personal income taxes to unprecedented levels to fight the depression.
…Hoover launched a massive public works program, part of which included funding for construction of the Hoover Dam on the Colorado River. His administration implemented stronger protections for labor and substantially increased federal subsidies for agriculture. Hoover also played a key role in passing the Glass-Steagall Act of 1932, which limited the activities of commercial banks in an attempt to stabilize the banking sector.”
The Hoover administration’s final attempt to stymie the Great Depression was the Emergency Relief and Construction Act, also signed in 1932. The Act provided government-backed loans to banks and created public works projects in the interest of increasing employment. This blueprint was greatly expanded by Hoover’s successor, Franklin Roosevelt. Roosevelt’s New Deal, along with the economically stimulating onset of World War II, would effectively end the Great Depression.
In contrast Roosevelt was president from 1933 to 1945, longer than anyone else
in American history; he was elected four times. He took office at one of the worst points in the Great Depression but told the American public, “ The only thing we have to fear is fear itself.” The early part of his presidency is remembered for the New Deal, a group of government programs designed to reverse the devastating effects of the Depression.
“There are two ways of viewing the Government’s duty in matters affecting economic and social life. The first sees to it that a favored few are helped and hopes that some of their prosperity will leak through, sift through, to labor, to the farmer, to the small business man. That theory belongs to the party of Toryism, and I had hoped that most of the Tories left this country in 1776.”(3)
“My program, of which I can only touch on these points, is based upon this simple moral principle: the welfare and the soundness of a Nation depend first upon what the great mass of the people wish and need; and second, whether or not they are getting it.”
“Yes, when–not if–when we get the chance, the Federal Government will assume bold leadership in distress relief. For years Washington has alternated between putting its head in the sand and saying there is no large number of destitute people in our midst who need food and clothing, and then saying the States should take care of them, if there are. Instead of planning two and a half years ago to do what they are now trying to do, they kept putting it off from day-to-day, week to week, and month to month, until the conscience of America demanded action.
I say that while primary responsibility for relief rests with localities now, as ever, yet the Federal Government has always had and still has a continuing responsibility for the broader public welfare. It will soon fulfill that responsibility.”
Compare the above call to action to the vacillating long-fingered and painful dilly dallying approach of the present government’s pie in the sky incentivisation of private developers with lending and tax relief incentives to build unaffordable housing for young families!
This approach has already failed and is now compounded with a complete absence of large-scale public procurement programmes to build social housing to end the scandal of homelessness…….
Roosevelt’s New Deal speech spoke of “Blame ourselves in equal share. Let us be frank in acknowledgment of the truth that many amongst us have made obeisance to Mammon, that the profits of speculation, the easy road without toil, have lured us from the old barricades. To return to higher standards we must abandon the false prophets and seek new leaders of our own choosing.”
Lets not delude ourselves many in our society are living off the pigs back as well paid TD’s or public servants members of the elite managerial class rewarded handsomely for their lack of effort and ability.
“Never before in modern history have the essential differences between the two major American parties stood out in such striking contrast as they do today. Republican leaders not only have failed in material things, they have failed in national vision, because in disaster they have held out no hope, they have pointed out no path for the people below to climb back to places of security and of safety in our American life.
Throughout the Nation, men and women, forgotten in the political philosophy of the Government of the last years look to us here for guidance and for more equitable opportunity to share in the distribution of national wealth.”
Unfortunately, here in Ireland we have no Roosevelt, our national parties of Fine Gael and Fianna Fail have become inextinguishable and unified as one.
Divisions between rich and poor have been compounded in recent years. We are heading for a south american style gulf between rich and poor energised by increasingly dictatorial Brussels as its member parliaments drift radically to the right eg Viktor Orbán in Hungary. Many see the drift to the right as similar to the drift that took place in Germany prior to the rise of naziism in the 30’s.
People do not get a fair deal in Ireland.
2 Shoe Boxes
Since the global financial crisis trillions have been poured into banks and financial institutions by the FED to reignite a broken financial system and get the economy going again.
Failure to legislate to control housing and property prices has led to this market being turned into casino investment subject to predatory exploitation and speculation by developer landlords many of whom are TD’s, rich speculators and vulture funds.
Government has done nothing to reign in this exploitation of Irish people especially the young attempting to gain a foothold for their families in the property market.
Vast amounts of financial resources in the form of vulture funds compete against private individuals to move them out of the property market providing rich financial pickings. Controlling rental markets that can extort any rent speculators wish to use extract profit.
People deserve to be defended by government and not be exploited by government.
What used to be homes has now been turned into property casino chips that prey upon victims destroying community and making decent family life unaffordable.
This is not just happening in Ireland. It has already happened elsewhere as in the USA.
“But it’s not just a low-income problem
You’d think that only low-income families would be stuffed like sardines in New York’s claustrophobic apartments, but that’s changing. While around 24 percent of crowded households self-identified in the bottom 25 percentile of income, 19 percent were in the top 25th percentile.
The average household income for people living in these crowded households increased by 2.7 percent between 2005 and 2013; the median rent, meanwhile, increased 12.8 percent. In other words, the rise in rents far outpaced the rise in income among people who live in crowded conditions. Here’s how the report puts it:
This suggests that the affordability of the City’s rental housing stock may have played a role in boosting crowding.”
You would think that part of the solution of Ireland’s homeless and property crisis would involve looking abroad for solutions we could implement here.
You wouldn’t expect the present government to import disastrous solutions to our housing problems that involve stuffing tenants like sardines into apartment blocks. But that is exactly what is proposed.
Fine Gael/ Fianna Fail plan to execute previous failed plans to stimulate private developers to address the housing crisis caused by lack of affordability and supply. The previous economic model that existed prior to our descent into the EU would have allowed government to raise loans on the open bond market, use Pension funds. However, our membership of bailout EU means our Fiscal Space (disposable income available for investment in our budget) is severely curtailed.
Our budget is largely out of our control as it is set out for us by the European Central Bank and its Fiscal Compact even though we go through mock-heroic rituals in the Dáil to pretend otherwise.
Some believe the only powers remaining in the Dáil is the power to preserve Dáil salaries.
So where is Ireland’s property market and homelessness crisis going under the present government?
The last few weeks provided a number of clues.
Reported in http://www.thejournal.ie/oaktree-new-housebuilder-ireland-3-3577078-Sep2017/ Glenveagh backed by Oaktree a vulture fund will probably target apartment building where 
apartments will be rented not sold to tenants.
Apartment sizes will likely be smaller: https://www.irishtimes.com/news/politics/new-apartment-guidelines-not-a-lowering-of-standards-kelly-1.2474849
“new orders will allow developers to have up to 50 per cent studios in a development as long as it contains 50 apartments and is “within walking distance of centres of employment or on or immediately adjoining major employment sites”.
“Earlier this year, Dublin City Council was excoriated for proposing studio apartments of 45sq m in just over 7 per cent of new apartment blocks, as long as they were in rental complexes of more than 100 units, with extra communal services.”
I’m not sure how communal living will be served by renters in shoe boxes living like sardines in a tin alongside young families in apartments too small for their needs. But the proposal is developer friendly addressing the conundrum of affordability vs profitability. Profitability will not be compromised by making these shoe boxes ‘affordable’. The formula is to sell 2 for the price of 1 maximizing profitability while reducing the quality of living standards.
Affordable is a curious term with many meanings. The real meaning becoming more evident by the day is that ownership will become less possible as an option. Instead vulture funds with access to vast funds will buy up all property both commercial and private. With the market cornered and contained they will be in a position to extract as much profit from letters and renters as they can get.
So-called democracy and capitalism in the west under the increasing financialisation of the global economy is fast disappearing. Private ownership of property is increasingly the preserve of state like conglomerates comparable to the communist USSR of old. Inevitably, the percentage of salaries required to finance extortionate property renting/let costs has significant impact on the real economy, the real economy suffering because capital is being hoovered out of the real economy to fund the profits of the growing minority who are the 1% benefitting.
affordability does not mean reducing the profits of vulture funds and private developers. It certainly does not mean reducing house prices to make the cost of property reduce thereby dropping people with large mortgages into negative equity perhaps leading to a property sell off and negative equity that might endanger the banks.
Commercial and private property has been switched into casino chips played as a high stakes game by the rich. That part about ‘for the people, by the people, of the people’ has been transposed by financialisation into ‘for the rich, by the rich, of the rich’. The EU has become the servant of this new ethos with its vast bureaucracy.
We need Irexit to support Brexit but under unspoken censorship laws the subject is off the table.
3 Brexit Talks Collapse
Talks on Brexit on brink of collapse, https://www.thetimes.co.uk/edition/news/the-ball-s-in-your-court-may-tells-eu-leaders-dz5kbtwms
It’s hard to see any agreement whatsoever pre Brexit between the EU commission, the EU parliament and the UK. A hard Brexit is almost inevitable.
“Rounding on Mr Martin, the Taoiseach said: “Is Fianna Fáil, the republican party, arguing now we should start training up Border guards, getting dogs ready, checking out sights for Border posts and truck stops ?’’
There has been a Leaked revenue report detailing the horror consequences of Brexit for Irish business. This has been witheld from public release. Part of the budget was announcement of unnecessary expenditure of €5ml on a communications(propaganda) office for government.
Yes, he should be scoping out Border sites and training border guards to prepare for the likelihood of a hard border. Varadkar in not preparing for such likelihood exposes himself as a head in the sand political stooge of Europe.
He should expect a phone call from his European masters telling him the date Ireland has to prepare for to make preparations for its hard border with the UK.
All the more reason for Irexit from Europe.
End
till again…..
- https://www.huffingtonpost.com/bianna-golodryga/no-more-backbone-than-a-c_b_12774594.html
- Fiscal Compact https://en.wikipedia.org/wiki/European_Fiscal_Compact
- http://www.danaroc.com/guests_fdr_021609.html
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