I very seldom venture into "economics". It's not something I have any real grasp of.
But the situation in Ireland is an example of what is being planned for Americans under the less-than-accurate 'Catfood Commission' reports and the ridiculously callous term "Austerity".
Reports of this are likely the only warning we'll get before we are eating squirrel and we return to the worst of times - artificially and needlessly.
Long story short - these terms mean that the super-rich - the Plutonomy, the 1% - whatever you want to call these people with the power and wealth of small countries who are capable of making decisions you or I cannot make and that will affect us quite adversely for years if something isn't done by somebody soon.
I like to read a gentleman named Mike Whitney. He writes in a way that helps me understand certain large and complex motions or happenings in economics.
Here's a bit from him about the EU/IMF deal in Ireland and what it's going to mean for the average person:
This is a black day for Ireland. The Irish people will now face a decade or more of grinding poverty and depression thanks to their venal leaders. As soon as the ink dries on the IMF loans, the second occupation of Ireland will begin, only this time there won't be armored cars and Paramilitaries in fatigues, but nerdy-looking bureaucrats trained in the art of spreading misery. In fact, the loans haven't even been signed yet, and already IMF officials are urging the government to cut jobless benefits and the minimum wage. They're literally champing at the bit. They just can't wait to get their hands on the budget and start slashing away.
And don't believe the hype about European unity or saving Ireland. My ass. This is about bailing out the banks. The bondholders get a free ride while workers get kicked to the curb.
The Rich. The banks.
Taking money away from common people.
We have already seen it in this country: we balied out the banks, who gave fatass bonuses to the assholes who criminally wrecked our economy.
That was a robbery.
Americans barely blinked.
Bristol Palin was on Dancing with the Stars, dontcha know?
It was
another bank bailout. Ireland is being asked to cut to social services, slash wages, renegotiate contracts, and dismantle the welfare state so that undercapitalized banks in France and Germany can get their pound of flesh. But, why? They're the ones who bought the bonds. No one put a gun to their head. They knew they could lose money if Irish banks went south. That's the risk they took. "You pays your money, and you takes your chances." Right? That's how capitalism works.
He actually points out that "no...it doesn't work like that anymore".
He paints Ireland's prime minister as a treasonous rogue who is a firm agent of the international bankers who have a plan to suck up most of the money in the world, impoverishing a variety of countries while the getting is good.
He says the IMF ain't happy til people are starving. I fully agree.
Ireland doesn't need structural adjustment programs that shrink GDP, dismantle popular social programs and strip wealth from workers when low interest funding and fiscal stimulus can bring the economy back to life. This is politics not economics. The EU and IMF are using the crisis to push through their own agenda. Their real goal is to crush the unions, shred the social safety net, and roll back the gains of the Progressive Era.
The Irish people are left with no choice but to resist. Presently the Cowen government is collapsing. Bravo. Now it's off to the barricades to see if the damage can be undone. Ireland needs to withdraw from the EU and start fresh. It'll be a bumpy road at first, but there's no other way.
The so-called 'Catfood Commission' has, as most here well-know already, released a set of suggestions or recommendations (depending on the valence of the spin) that are quite similar in nature, but which are being given the Pig Makeover right now so the "suggestions"
deep cuts in domestic and military spending, a gradual 15-cents-a-gallon increase in the federal gasoline tax, limiting or eliminating popular tax breaks in return for lower rates, and benefit cuts and an increased retirement age for Social Security.
are said to be just that: suggestions.
Now, I AM for cutting Defense Spending - that's one of the biggest wastes we have. And yes, I think defense spending can be curtailed without harming the actual people who are the troops. It can be done, but, you know that reeks of socialism. But I digress.
As long as people lay there and take it, this will march down the road and on their backs.
Whitney quotes Dean Baker from the Guardian 11.22.10, in which he talks about how the IMF punked Argenina for years, screwing the people worse and worse. I am fleshing that out a bit.
Baker argues that Ireland should ditch the euro and default on loans and the route out of this needless scenario.
The ECB and the IMF will insist that this is the road to disaster, but their credibility on this point is near zero. There is an obvious precedent. Back in the 2001, the IMF was pushing Argentina to pursue ever more stringent austerity measures. Like Ireland, Argentina had also been a poster child of the neoliberal crew before it ran into difficulties.
But the IMF can turn quickly. Its austerity programme lowered GDP by almost 10% and pushed the unemployment rate well into the double digits. By the end of the 2001, it was politically impossible for the Argentine government to agree to more austerity. As a result, it broke the supposedly unbreakable link between its currency and the dollar and defaulted on its debt.
The immediate effect was to make the economy worse, but by the second half of 2002, the economy was again growing. This was the start of five and a half years of solid growth, until the world economic crisis eventually took its toll in 2009.
Whitney concludes noting that the People of Ireland didn't suffer centuries of hardship to end up as debt-peons for the 1% and Baker reminds us
What the people of Ireland and every country must realise is that if they agree to play by the bankers' rules, they will lose.
Our "catfood Commission" isn't talking about things as heinous as what is about to befall Ireland, but I think - and this is the way I am - trusting them not to try and sink their knives into you and your family as deeply as possible is simply irresponsible and very poor judgment.
I think what you are seeing happen to Ireland is pretty much exactly what they want to do to the US, if it's not already well underway.