WHERE ARE WE AT? 1712 CIX

WHERE ARE WE AT?

Albert Reynolds reflected ruefully after his downfall that it was the small hurdles rather than the major ones which tripped you up. Leo Varadkar would do well to keep those words in mind as well as Harold Macmillan’s dictum that the best laid plans could be negated by “events, dear boy, events.” Several occurrences over the last month demonstrate that unknown unknowns can suddenly materialise with potential to wreak unexpected damage. One in particular, still very much current, could have profound ramifications.

First up was the latest Irish postage stamp featuring a famous person. Not normally something to generate controversy, but in this case the image was of Che Guevara, a gentleman with, to say the least, a chequered reputation, and who still generates strong feelings for and against fifty years after his death ( the excuse for the timing of the stamp’s launch). The initial print run of the stamp – 122,000 – sold out rapidly. Apart from the usual stamp collectors, who buy every new issue, one can assume that purchasers included some admirers of Che, together with others hoping that the stamp might one day acquire scarcity value because of its potential notoriety. There were the expected squeaks from the Irish right, some protests and complaints from circles in the USA – especially among Cubans in Florida – and matching sounds of pleasure from the Irish left.

It wasn’t of course just an image of Guevara. It was THE image – the iconic portrait by Irish artist Jim Fitzpatrick which has adorned millions of T-shirts and wall posters worldwide over the decades since Fitzpatrick put it into the public domain in the late Sixties. When Castro died I wrote in my column that, for most people “the image of the Cuban revolution that comes first to mind is Jim Fitzpatrick’s iconic rendering of the 1960 Korda photo of Che.” It conferred a type of romantic immortality on Guevara and the Cuban revolution, making it possible to ignore the fading and aging Castro (not to mention the dubious and mixed record of the revolution) while cherishing that preserved sanitised image of Che.

The choice of Guevara was justified as meeting the criteria of showcasing some aspect of Irish life, culture or history, having a subject and design with international appeal and of contributing an outreach to the Irish diaspora of Latin America. Amen to the design; indeed Jim Fitzpatrick could well merit a set of Irish stamps for his Celtic artwork alone. The diaspora argument is less convincing – Guevara’s Irish connection goes back to an emigrant of the mid 1700s, posing the question of how many other people of the 80 million Irish diaspora are likely to feature on future Irish stamps. The question might also be asked as to the relevance to Ireland of a stamp issued a week after the Guevara one commemorating the centenary of the supposed Apparition at Fatima. All proposed new stamps are routinely run past the Government for approval; expect future lists to be scrutinised more closely.

More seriously came the revelation last week that three Irish T.D.s propose to visit North Korea early in the New Year to seek to engage in talks with Kim Jong Il. And not just T.D.s but the three Government Ministers from the loose –knit Independent Alliance grouping who, together with Fianna Fail, are essentially keeping the Fine Gael Government in power after the painstaking Coalition –cobbling by Enda Kenny last year. The announcement has been greeted with derision in some quarters, dismay in others and plenty of uncomplimentary comment in the social media. The Taoiseach, with limited room for manoeuvre, while not banning the visit, has voiced disapproval, as has the Minister for Foreign Affairs. Whether the visit will go ahead remains to be seen. The trio are to be briefed this week by Foreign Affairs and have apparently been invited to discuss the visit by the North Korean Embassy in London.

The potential for any such visit to go wrong is clear. This is, to put it mildly, a fraught period in relations between North Korea and the international community, spearheaded by the USA, with Trump and Kim not far away from an eyeball to eyeball confrontation. Indeed some of the more pessimistic observers rate the possibility of war as upwards of 50%, with each bellicose exchange between the two presidents ratcheting the tension up further and increasing the chances for a miscalculation. Observers are unanimously agreed that a military conflict would be disastrous, with even a conventional war generating tens of thousands of casualties and a nuclear exchange very many more. Much hope is being pinned on the Koreans acting rationally – which is fine as long as Trump does likewise.

A visit by Irish Government Ministers, even by members of the Independent Alliance, and even if described as private and not official, is open to immediate misinterpretation, coming as it would at a time when the major players – who do NOT include Ireland – are seeking to exert pressure on North Korea and the international community is being exhorted to isolate the regime. At the very least any visit would hand Pyongyang a propaganda boost which Kim and Co might seek to exploit as proof both to their unfortunate citizenry and to the rest of the world that their policy has international support. Worse would be were Pyongyang actually to BELIEVE their own propaganda. Right now the stakes are very high and the role for Irish politicians is surely to avoid fanning the embers.

Finally on November 2 Apple refused to confirm that it would go ahead with a planned data centre in Athenry Co Galway, after a two year planning process. What was particularly galling was that the refusal to confirm was made by Tim Cook, Apple’s Chief Executive, in a face to face meeting with the Taoiseach in California. The Taoiseach’s response, to announce that henceforth data centres would be designated as strategic infrastructure on a par with motorways and railways indicates just how worried the Government is.

The Athenry project was stalled, inter alia over public objections and appeals. There were audible sighs of relief (and local rejoicing) when the appeals were rejected several weeks ago and again when the Irish High Court refused leave for further appeals. Yet the worry for the Government is that Apple, in tandem with announcing the Athenry project, announced a similar one in Denmark. Two years on, while Athenry has been mired in the planning process, the data centre in Denmark has been built and is about to go into operation. A decision is to be announced shortly regarding a further data facility. It would be a supreme optimist who would put money on the new project going to Ireland.

Whatever ultimately happens over Athenry (and Apple could still say yes) the worry right now is that Apple could decide that the planning process here is not worth the candle and opt for elsewhere (there will be no shortage of candidates), and that this would sway other companies planning future or further investment. Nobody disputes the need for planning, but a way must be found to streamline and speed up the process. Big Boys Rules, Leo.

END
10/11

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PIECE OF CAKE 1711 CVIII

PIECE OF CAKE – NOW FOR THE HARD BIT

Leo Varadkar’s first Hundred Days as Taoiseach (actually 120, from his election on 14 June to his first Budget on 11 October) have gone smoothly. He even emerged unscathed from Ireland’s recent brush with Hurricane Ophelia – one of those “events” which can unhorse the most assured rider. Echoing Basil Fawlty, now comes the hard bit!

Dr Varadkar has already chalked up one signal achievement as Taoiseach, lancing the boil of that disaster that just kept on giving – Irish Water – with his decision to repay in full all those who actually paid their water bills. At a stroke this ended the hand wringing and indecision which plagued the political scene here since paying for water emerged as toxic several years ago. A line has been drawn under the issue. End of! Which is just as well, with several major matters simmering and the need for the government to stay focussed and not distracted. Brexit, and the timing of the next election are looming, while there is likely to be considerable distraction in any event over the referendum on the Eighth Amendment, signalled for mid-2018.

The brouhaha over Irish Water, which saw the Left cleverly construct a populist platform garnering significant support across the broader community was in a way Ireland’s echo of the Brexit vote, the Trump election and the continued electoral support across Europe for populist parties. Here, frustration over years of austerity, higher taxes and diminished disposable income crystallised into opposition over one extra imposition. In the context of this discontent we are perhaps fortunate that there was no referendum here similar to that in Britain. If and when a deal IS agreed between the EU and Britain, that possibility may yet have to be faced.

Quite what will happen over Brexit remains unclear, with only seventeen months remaining before Article 50 kicks in and serious negotiations not yet begun. British policy blows hot and cold, reflecting, as well as disarray among the Tory government, the lack of any clear advantageous course for the UK to follow – something obvious to all but the most diehard Brexiteers. The EU stance currently is best summed up as a determination that Britain will not have its cake and eat it, as Boris Johnson whimsically remarked a year ago. For their part some of the British hardliners remain steadfast that ultimately Europe will cave in as its trading links with Britain are too important to be let fail.

For Ireland, the country with the strongest trading and other links with Britain, and facing potentially the most serious consequences, the outlook is not good and the issue will clearly concentrate Leo Varadkar’s mind in the months to come. How to proceed, essentially in the dark, is not easy. The government thus far has eschewed making preparations for a hard Brexit, involving as it would recognition of some form of renewed border between the two parts of Ireland. The Taoiseach has stated firmly that Ireland will not help Britain devise a border that “we don’t want.” All sides are agreed, and have stated, that some solution must be found to prevent a renewed Border happening, but pious words and aspirations are one thing, the grim prospect of Britain falling out of the EU, without agreement, if talks collapse, quite another . The deadline for a neat exit seems increasingly unrealistic. Perhaps some stopping the clock process – at which the EU is very good – could be applied. Seen now, the near disaster for Ireland that a collapse of the negotiations would mean still seems unlikely, yet the clock is ticking. The next couple of months could prove decisive one way or another.

The clock is ticking also towards the next election. The current arrangement between Fine Gael and Fianna Fail was for three budgets, with Fianna Fail, which can collapse the arrangement at any time, holding the whip hand. The Taoiseach’s one ace is that he can, should he so wish, call an election. We have so far had two budgets , the recent one a steady-as-you-go “neutral” budget which might well prove to be the election budget Crucial is how Fianna Fail judge the government’s (and, therefore, the Taoiseach’s) performance and prospects in deciding if and when to pull the plug. A continued improvement in the economy, with no banana skins, could see support for the Government rise, something Fianna Fail will wish to avoid. Currently the opinion polls are showing no discernible trend, beyond some gradual drift back in support to the two major parties. Fine Gael and Fianna Fail are still close in the polls and, while the vagaries of the vote in individual constituencies could swing a number of seats, the professionals in both parties will be loath to gamble, given the fickleness of the electorate.

At this point any banana skins seem unlikely to be strictly economic ones. The economy is doing well, full employment is close, the forecast is for a break-even budgetary outcome and modest but actual tax reductions will kick in in the New Year. However, there remains the construction industry, important for the economy and with accompanying social and political ramifications. With the industry slow to recover and the spectre of the 2007 crash still haunting, very few homes are being built, and virtually no social housing at all. The result has been a steady rise in the declared numbers of homeless families, an issue which has now become a political and media hot potato, with attention focussing in particular on the several thousand children now housed temporarily in hotel accommodation.

There is no quick fix. Houses and apartments take time to build, from planning to signing off. Meanwhile, with demand exceeding supply for existing properties, prices are surging for those who can afford to buy and a head of steam is building up to loosen the purse strings on borrowing. At present the Government is holding firm, determined to avoid another property bubble. Handling this and the homeless issue will test the Taoiseach’s mettle. Something needs to be done – but what? And how to avoid the hot potato becoming a political football, with the opposition upping the stakes. Varadkar needs to get his own mandate and, with historically low interest rates and anxious backbenchers, he may well have his hand forced.

Another factor comes into play. The Taoiseach has already promised a referendum on the Eighth Amendment (Abortion) in May or June next. However it pans out, the campaign and debate promises to be emotive, fractious and contentious, with the outcome unlikely to be as decisive as that on Same Sex Marriage in 2015, when, effectively no side was the loser. There is no telling what collateral damage could accrue to politics and politicians here as a consequence. Additionally, several other, minor, referendums have been signalled for late 2018, on blasphemy, directly –elected mayors and the role of women in the home, none issues likely to stir passions. One suggestion is that they could be held on the same day as the next Presidential Election, also due in late 2018. All these cost money and effort and risk turning off the electorate. Poll fatigue may well push the General Election into 2019.

21/10

FORTY FIVE 1710 CVII

FORTY FIVE

This time last year I wrote a piece for an Irish union magazine assessing the prospects and what we might expect in the pending US Presidential Election. Like most observers I was fairly confident that Hilary would win, though I did hedge my bets by pointing out that at the time (September 25) the opinion polls were too close to call and that in a number of crucial states Trump was either ahead or closing fast. Nevertheless waking up on November 9 to discover that Trump had won was dumbfounding.

Looking back it is clear that if Trump could successfully shrug off as “locker room talk” the outrageous sexually offensive “grabbing” remarks made to Billy Bush, his core support was unshakeable. And so it proved. Most voters for both main parties in US elections do not normally change and if they do there are particular underlying reasons. In 2016 a long festering mood of alienation and frustration among a certain sector of the electorate found expression in support for a different candidate, one outside the mainstream who could tap into their atavism. Enough of them voted in key states to deliver the election.

Now here we are, a year on and almost ten months into the Trump Presidency. What are we to make of him, particularly from this side of the Atlantic? There follow a few thoughts, preliminary and tentative, since these are still early days, with the very real prospect that his Presidency has another seven years to run. As I write there hasn’t yet been a defining moment. Defeats and setbacks yes, but he hasn’t been seriously tested. North Korea might do it but right now all he’s done with the Koreans and everyone else has been to strut and shadow box, insulting allies and foes alike while also blowing hot and cold on substantive international issues. What will he ultimately do about the Paris Agreement, NAFTA, relations with China and Russia, and the Middle East? His inauguration speech evinced a dismal weltanschauung . If anything his recent UNGA address, bellicose, nationalistic and devoid of idealism has fortified this.

If there is a characteristic Trumpian style it is his use of Twitter, his habit of delivering usually half-baked, half thought -through instant reactions to events and developments. Like most, I expected that in office he would desist or curb this habit. He hasn’t. Whatever else may be said about him, he is not slow to get his message across and to hell with the consequences. No one can fail to grasp how he feels on an issue, however uneasy that sits with the observer. This after all is not some know-all troll, with an itchy texting finger, but the US President, with access to and power over the nuclear trigger. There is a real, if not present, danger to this.

We now pore over the occasions where there is no tweet but just a silence. Is he being reined in, or reining himself in on issues where he had best tread warily? The vacillation on the Paris Agreement, the equivocation on handling the Dreamers, the cutting loose of the likes of Bannon, suggests that Trump is indeed on a learning curve, but with so much required to learn on so many issues, there must be doubt whether he will ever adequately do so. Who can forget his wide eyed comment that the Health Care issue was complicated? So are most issues in the POTUS in-tray, Mr. President.

A year in, one thing that strikes is how totally Trump dominates the US political scene – something that does not bode well for either major party. I cannot remember this domination by a previous US President since the Sixties, when the nation was wracked by Vietnam. Even then there were loud, powerful and articulate voices opposed to LBJ, who was eventually forced out of the 1968 race. Today there seems no one to oppose Trump, with the only constraints the Constitutional safeguards, which so far have held, and his own propensity for inflicting self-damage. The Republican Party is in shreds, weakened by the Tea Party over a decade and savaged by the Trump seizure of the nomination. The Democrats are leaderless, holed below the waterline by Hillary’s defeat and still licking wounds. Meanwhile Trump proceeds with giving effect to his election undertakings, distractions such as the Russia factor and staff changes notwithstanding. Unless a smoking gun appears the Russia dimension, though an irritant, is unlikely to be his undoing, while previous Presidents have also had staff upheavals.

Given the radical platform on which he campaigned, interest here has focused on how successful he has been in putting those policies into effect. And while there has been considerable gloating over the failures to repeal Obamacare, the setbacks over his plans for immigration controls and deportations and the stalled Wall, none of these have affected or seem likely to affect his core support. Even the equivocation over the racist right has not done it, with the media focus having shifted to the hurricanes, where he handled the PR astutely, and the sudden apparent cosying up to the Democrats over the budget ceiling and the Dreamers. On this last, remember that Populism is a broad church and that, faced with a sluggish or non-performing Republican dominated Congress, Trump will try out other options.

While Trump has withdrawn from the Trans Pacific Partnership (whither goes it now?) , the other big ticket items such as Tax Reform, NAFTA, and what to do about the Paris Agreement have yet to be reached. He is meanwhile ticking off his list of campaign promises, circumventing for the moment the need to introduce new or amending legislation in Congress by using the available weapons of unilateral Executive Orders (45 to date), Presidential Memoranda (32) and Determinations (6). Numbers of these have together rolled back or reversed significantly progressive measures and legislation in a number of areas, while business has been favoured by cutting a swathe through regulations. The outcome has been a depressing roll call of measures affecting adversely a number of areas of American life from the Environment to personal freedoms. The mantra has been “America First,” with an emphasis on freeing up business to create jobs. We shall see how that one pans out.

Very few Presidents succeed in giving effect to their programmes in entirety. Trump will be no different. But when the process is at an end, rather than decry his failures, Trump will defend his record, point to his successes, attack the media and his opponents and declare that the Swamp was far worse than he had imagined and that he will need a second term to drain it thoroughly. His core support will buy it.

A second term? Right now Trump seems poised to run again in 2020. What Republican, after all, would dare oppose him, to face the bluster, the demagoguery, against those background, quasi- fascist, chants of “Trump Trump Trump” at rallies. Trump routed his rivals last year. As the incumbent he is fireproof. To defeat him will require a military fiasco, a mega scandal or a Democratic champion on a white horse. Don’t hold your breath.

20/9

NO EASY ANSWERS 1709 CVI

NO EASY ANSWERS

There is no magic bullet to end the threat from fundamentalist Islamic terrorism. There seems no shortage of impressionable individuals sufficiently duped into being willing to murder other human beings, killing themselves or being killed in the process, on the promise of some form of paradise in the next life. There have always been those with no moral compass, who have seen nothing wrong with murder, but usually society – every society – has coped with the threat they represented. On occasion this has taken time, particularly where a madman has succeeded in gaining political or military power, requiring considerable effort and bloodshed to bring him down. But grafting religion onto regular fanaticism produces a formidable combination indeed, ruthlessness allied with zealotry and bolstered by self -righteousness.

Lest we forget, killing people of a different religion was once common in Europe. The century and a half following the Reformation (the Quincentenary of which falls this year) was replete with wars of religion as Protestants and Catholics fought for superiority and hegemony, conflicts exacerbated by the simultaneous separate evolution of the nation state.

Eventually the religious factor waned in lethality, though not necessarily in importance. With a few exceptions Europeans ceased to murder or make war on their neighbours just because their religion was different. You might not like them, you might find clever ways of discriminating against them but you didn’t kill them. There were plenty of wars but not over religion, though religion remained a convenient label for identifying or defining enemies.

The second half of the Twentieth Century has seen a further evolution in Western society. Post -1945, with the ignoble exception of the Jugoslav Wars and several small internal conflicts, Europe has been at peace. And, over this period, European and Western Society generally – loosely defined as the countries of the First World – has become, for want of a better word, secular. This is not to deny that there are many millions of Western Europeans who hold firm and sincere religious views. But in the main our societies are defined, not by adherence to any particular religion, but by being democratic, tolerant of other opinions, espousing freedom of speech and expression and having regard for the prevailing system of laws. We live in effect in a post-religious society.

While this last assertion might be disputed, the point I wish to register is that there is a near consensus in our societies, embracing alike Christians, Jews, Muslims, Buddhists, Atheists, Agnostics and whatever. That consensus puts religion – and for that matter political ideology or other belief – firmly in a place circumscribed by obligation to and tolerance for other viewpoints. There are, of course (always) mavericks who do not subscribe to this – Neo Nazi groups on the right, extremist groups on the left – but they are normally inconsequential or easily dealt with ( witness for example the Baader-Meinhof group in Germany in the seventies).

ISIS and its acolytes are the latest mavericks but with distinctive features which render combatting them difficult. Let me state the obvious. ISIS is not mainstream Islam. The overwhelming majority of Muslims, in every country, are totally opposed to the acts of murder and terror carried out by fanatics, whether it be the recent mass murders in Barcelona, Manchester, and London or the mass murder of Coptic Christians (28 shot and murdered) in Egypt three days after Manchester. They are equally totally opposed to the terror attacks perpetrated on other Muslims which happen almost daily in the Middle East. Indeed though we tend to focus on attacks in the West, the scale of murders of Muslims by other Muslims in sectarian terror attacks dwarfs by far what has occurred in Europe.

ISIS and its associated jihadi groups, like Boko Haram in Nigeria -which has killed 20,000 (!) people in its eight year campaign to turn Nigeria into an Islamic state – have their roots in the Salafi or Wahhabi branch of Sunni Islam. These groups comprise a small minority of Salafis (most Salafis shun politics) and follow an extremist interpretation of Islam, which promotes religious violence and regards other Muslims as apostates or infidels and just as fair game for attack as non-Muslims. Hence the atrocities against other Muslims. The Jihadis are a lethal offshoot from the Sunni side of the great divide in Islam between Sunni and Shia. Currently this divide is to be seen in the struggle for domination in the region between the Sunnis (championed by Saudi Arabia) and the Shias (represented by Iran) with political, religious, social and civil conflict, and proxy wars in several countries. Shades of the Christian Wars of Religion of 400 years ago.

Inevitably, given their ideology, ISIS and the other fundamentalists have focussed sharply on the West, re-igniting the ancient embers of conflict between Christians and Muslims. Hence Nine Eleven. Hence the terror campaign in Europe. If not a popular cause it’s one that appeals to some. It is after all not hard to find reasons why the West should be resented in the Middle East. The Western powers picked over the remnants of the Ottoman Empire and, since the Crusades, the West has intervened militarily when its interests were at stake. Then it was religion. Now it is oil and economic imperialism. The West’s dramatic economic growth and prosperity since 1945 is seen as underpinned in part by the exploitation of the one major natural resource the region has – Oil.

Most of the oil wealth has accrued to feudal and despotic ruling elites, shored up by the West, with very little trickling down to the impoverished majority populations. The invasion of Iraq, the intervention in Libya are seen as the most recent examples of the West’s continuing interference. All this has been compounded by Western support for Israel while the plight of the Palestinians is ignored. Some of the resulting brew of humiliation, resentment, and frustration has been imported directly into Europe by large scale immigration from North Africa over the last half century. Here it festered among some, providing fertile ground for jihadist recruiters. The mix of ample funding, religious zealotry, articulate radical preachers, modern communications and a simple clear message and cause on top of patriotic and social frustration and alienation has produced results – and recruits.

ISIS operatives have proved flexible and innovative, switching tactics, using a combination of “Lone Wolfs” and organised terrorist cells. Whatever weapons are to hand have been employed, guns and explosives when available, anything else otherwise, including knives and, ominously, ordinary everyday trucks and cars, driven at speed indiscriminately in crowded areas with horrendous results. There appears no adequate defence against attacks of this sort by people prepared to die in the attempt.

There’s no easy answer. The first priorities have to be containment and prevention, all great in theory but difficult to achieve total success. The check list of preventive measures is easy to compile and more and better of the same can be calculated to make life and operations more difficult for the extremists. But it won’t win over any hearts and minds. That will take time. And, rest assured, ISIS will continue to improvise and hone their methods. We are in for a long haul.

16/8

BACK AND NOT FORGOTTEN 1708(2) CV

BACK – AND NOT FORGOTTEN

Brian Cowen was back in the news in mid-July when he received an Honorary Doctorate from the National University of Ireland, an honour given to every ex Taoiseach since De Valera. Ireland has no official honours system and the public shows no enthusiasm for one. In reality Honorary Degrees are issued sparingly and are generally uncontroversial.

Not so on this occasion. One recipient of an Honorary degree, Ed Walsh – of University of Limerick fame – announced he would return his award in protest, attacking Cowen and his predecessor, Bertie Ahern, for having “through their inept stewardship, brought Ireland to its knees” from the perceived highs of 2000. Further criticism followed, though there were also media articles praising the courage and resolve of Cowen, after the 2008 crash, in introducing, in tandem with his Minister for Finance, the late Brian Lenihan, the harsh and brutal budgets which did much to set the country on a relatively early road to recovery.

Nine years later the economy is booming, with the highest growth rates in the EU, consumer confidence high, employment set to reach the 2008 record levels and all the indicators (Brexit implications apart) appearing positive. This despite serious legacy issues remaining, including those in negative equity and others with unsustainable private debt. To what degree the heavy lifting of the Cowen and Lenihan budgets laid the foundations for recovery is a matter for dispute. What is not in dispute is that Cowen stuck with the task, destroying his political career (and very nearly Fianna Fail) in the process. There is surely a comparison here, ceteris paribus, with Cameron walking away from British politics after the Brexit vote went against him.

Brian Cowen has become the convenient fall guy for the misfortunes of the last decade. Minister for Finance under Bertie Ahern for almost four years, he became Taoiseach in May 2008. For virtually all of the period to March 2011 he was in mega-crisis management, first dealing with the Lisbon Referendum defeat in June 2008 and then the economic and fiscal crisis which broke in earnest in September. The last months of his premiership were dogged by the EU and the IMF bailout intervention in November 2010 when the government’s international credit ran out.

Much has been written and spoken about the origins and aftermath of the 2008 Irish economic crisis. There have been numerous books, acres of journalistic comment and several Inquiries, and the events have been picked over exhaustively. Cowen himself gave lengthy contributions to the official Oireachtas Inquiry into the banking crisis, which pointed up the obvious failures in banking, regulation, and government, adding the EU for good measure. And everybody has an opinion.

Arguably Cowen was given a hospital pass at the outset, becoming Taoiseach when the slide into economic and fiscal crisis was unstoppable, and about to rendezvous with the burgeoning international economic cataclysm. Particular opprobrium centres on his performance as Finance Minister under Bertie Ahern when the components of that crisis were festering and when some remedial action might have been taken. His performance is contrasted with that of previous Finance Ministers, who reined in spending, raised taxes and controlled credit when required.

To what degree was it down to him? The issue is not simply black and white. Let’s take a slightly different tack and jog a few memories. Brian Cowen did not set out to destroy the Irish economy. He was a Minister in the Ahern government from 1997, becoming Minister for Finance in 2004, succeeding Charlie McCreevy, who had been seven years in the post and who, together with Ahern, had stamped an indelible mark on the economy. These were heady years of unprecedented prosperity, national self-confidence and self-belief. The Celtic Tiger was roaring, with investment flowing in, money cheaper than ever before and Peace in the North – as never before. The government seemed to have, if not the Midas Touch, then enough good fortune and surplus revenue to expand simultaneously spending, cut taxation and reduce the National Debt. All of which it did – in spades.

Some figures. From being down the league table of welfare payments Ireland rose rapidly, catching up and then passing Britain – an important psychological and political milestone, dispelling the image of Ireland the poor neighbour. Between 1997 and 2004 old age pensions and unemployment assistance doubled while child benefit quadrupled. Taxes were slashed. Some at least of Ireland’s infrastructural deficiencies, both physical and psychological, were tackled. It was a painting by numbers scenario, with everything seemingly achievable, given time. In 2002 Fianna Fail fought an election with the slogan “A lot done. More to Do.” The Ahern government was re-elected (the first since 1969 not to be kicked out by Ireland’s fickle electorate); the opposition routed.

Embracing the Euro in 2002 proved fateful. Not only was there a bountiful supply of ultra-cheap money available to borrow but crucially the government had yielded fiscal control to the ECB. The hubris of appearing the most enthusiastic Europeans overcame any reservations. Initially this didn’t matter. The government’s coffers remained stuffed, there was full employment, emigration had ended, economic growth was continuing, Indeed there was now net immigration, further bolstering the strong demand for housing where now there was cheap credit available to meet that demand. McCreevy, in his last budget, declared “our policies have ensured the end of the era of mass unemployment and emigration” and were “improving the living standards of both tax-payers and social welfare recipients alike.”

By 2005 there was clearly a housing bubble, yet the economy continued to expand and there was additional massive inward migration from the new EU Member States, further stoking the economy. By 2005 also the government was past the halfway mark and looking towards the next election. Moreover seven years of rising prosperity had generated a sense of entitlement for many, a sense of hubris for others, and a sense of trepidation and frustration for those who wanted in on this prosperity, all encapsulated by the property boom.

Some economists might deplore what was happening to house prices, but for those who owned them outright there was quiet and smug satisfaction as prices rose, for those who had just bought, a heartfelt wish not to see the market collapse (and with it their investment) and for those seeking to purchase, a desperate desire to clamber onto the ladder before it disappeared out of reach. A classic property bubble.

Employment was surging (to over two million), and with it buoyant tax revenues of every sort – not just stamp duty from property sales. There was money to put aside (1% of GNP) for the (rainy day) National Pensions Reserve Fund, money to subsidise further cuts in taxation, and money to be lavished on more social welfare increases. With an election pending the public appetite for more was fuelled by the Opposition Parties and the various lobby groups. Their message was simple: “You have the Money. Spend it!” In his Doctoral acceptance speech Cowen referred wryly to the 2007 election manifestos of the other main parties. They’re worth looking at, if only to show how widespread and entrenched that mindset was.

Most people knew it couldn’t last. But there was a general wish not to rock the boat. “Lord Make Me Pure but Net Yet.” From mid-2006 on there were pious hopes for a “soft landing,” that a combination of unsustainably high prices and rising interest rates would cool an already faltering property market. Another tax cut – ironically in stamp duty – proved the tipping point and the property bubble burst. The situation might still have been salvaged had not the worsening international economic situation intruded. The effects of the sub-prime crisis in the USA began to be felt in Ireland and elsewhere in what became a worldwide domino-effect downturn not seen since the Thirties. With the Irish banks in trouble, with the property market collapsing and with an international recession taking hold, for Ireland, and the new Taoiseach, it proved a perfect storm. The cruel logic of economics, that the multiplier effect applies in times of contraction as well as expansion, did the rest.

Hindsight is wonderful. We have learned since that property bubbles are toxic, that light touch regulation does not work, that banks and bankers need to be controlled and that we cannot remain unaffected by events in the world outside. In his acceptance speech Cowen admitted that the problems revealed “should have been identified earlier and policy should have changed prior to the crisis.” He did not go into specifics. Whether the public at the time would have bought the type of radical change necessary is another matter. Whether it would have worked, given what was coming down the tracks from outside, is also conjecture. 2008 was a crisis of a different magnitude to 2002, or even 1987. Brian Cowen proved to be an unlucky general; for him, for us.

He who rides a tiger will find it difficult to dismount. So it proved.

S.F.
16/8/17

WE’VE COME A LONG WAY 1708 CIV

WE’VE COME A LONG WAY

One of the strongpoints seized by the 1916 rebels – and the scene of bitter fighting – was the South Dublin Union, the major Workhouse for South Dublin, housing some 3000 people. With the abolition of workhouses by the new Irish state, the surviving Union buildings morphed into what is today part of St. James’s Hospital.

The Workhouse was a crude and early attempt to alleviate absolute poverty by offering accommodation and employment to those unable to support themselves. Its heyday was in Britain in the nineteenth century, where the first evolving industrial society had to cope with the side effects of industrialisation – the expansion in population, the growth of towns and periodic bouts of unemployment as bust followed boom. At least 160 workhouses were set up in Ireland, catering for hundreds of thousands of indigent poor.

The very name “Workhouse” generates feelings of revulsion today, with images of the poor and destitute being herded into unsanitary buildings and compounds where they were forced to labour (including children) for bread and a bed, with families being broken up under a system deliberately designed to be harsh, to deter the able bodied poor from living off it. The proceeds from the work inmates performed were intended to defray the workhouse costs, which would otherwise fall on the local ratepayers. The comprehensive Wikipedia article on Workhouses makes for a fascinating read.

A dreadful system, designed, to address not Poverty, but Pauperism. But it was a dreadful time, when someone born poor had few prospects, social mobility was limited and life expectancy short. There was not even a rudimentary welfare state, no old age pension, no health system. And the workhouse era was not too long ago. In the 1890s Charlie Chaplin spent time as a child in a workhouse; George Orwell wrote of his time in one in the 1920s. They continued to exist, in one form or another until the British Welfare State was brought into being after 1945.

One aspect of particular dread to the elderly was the prospect of separation, when necessity forced old people to resort to the workhouse. “My Old Dutch,” one of the Music Hall songs of the 1890s, many of which dealt with the life and tribulations of the urban poor, if slightly maudlin, captures poignantly the moment of no return at the workhouse entrance. The singer/narrator, is an old man – for the time, life expectancy was far lower – unable to work and reduced, therefore, to the workhouse to house himself and his wife of forty years. They enter, without hope of ever getting out, and are separated. He sings – maudlin but highly charged all the same:
“We’ve been together now for forty years, An’ it don’t seem a day too much, There ain’t a lady livin’ in the land As I’d swop for my dear old Dutch.” (Dutch being abbreviated Cockney rhyming slang for “Duchess of Fife” = Wife.)

We’ve come a long way since then, but I was reminded of the song, almost serendipitously, by what happened to the Devereux family from Wexford in late June. How the elderly are treated in any country is a good measure of that society and thus far Ireland is probably due a few brownie points in this regard. The state old age pension is reasonable and is supplemented by a number of additional supports including free travel (a much prized benefit) and assistance with the cost of electricity and TV license, all of which survived unscathed during the recent era of cutbacks. Most of the elderly are in receipt of medical cards providing for free care and treatment, with free doctor’s visits for those over seventy who don’t qualify.

Money apart, the main thrust of state support for the elderly is through the Home Care Package administered by Ireland’s Health Service Executive (HSE). The aim of the package is to provide service and support to enable the elderly to stay for as long as possible in their own homes, rather than be obliged to move into a nursing home, either one publicly owned ( of which there are too few) or privately run (which are ruinously expensive). The package is not perfect, not comprehensive and suffered severe cutbacks during the Recession, the mantra that everyone should take a cut being applied callously to the old and infirm, who were for obvious reasons least likely to complain. However there is a structure there, cuts can be restored, it can be built on, it is what most old people want and it is far more economical to the state and the individual than nursing home care. It is also not means tested, an important consideration.

Nevertheless there comes a time when the elderly can no longer cope. 90 year old Michael Devereux and his wife, Kathleen, who is 86, and who have been married for 63 years, applied in March for participation in the Government’s “Fair Deal” scheme to cover the cost of long term residential care in a nursing home. The scheme involves a person (or a couple) surrendering most of her or his income, and up to 22.5% of the equity realised on selling the home after death. There are obvious flaws with the scheme but it represents an attempt to grapple with an issue that is likely to increase in importance as the number of elderly infirm people living longer seems set to rise. Either the state builds a lot more nursing homes or devises a formula to assist those entering private nursing homes by splitting the ruinous cost.

The problem in the Devereux’ case was that, initially Michael was awarded a nursing home place but the assessment of Kathleen was that she was healthy enough to continue to live on her own. The couple were thus to be separated with Kathleen expected to continue to live at home. When their son appealed, a review panel determined she was capable of living independently. The story broke on RTE Radio’s LiveLine on June 26, with an emotional interview with Michael Devereux, complaining that after sixty three years together he and Kathleen were to be separated. Once the piece was aired, an “Operation Stable Door” was mounted by the HSE, which ran for cover. After critical comments by Health Minister Harris and the Taoiseach, the HSE acted. The case was resolved in a day and Kathleen is to join Michael in the home.

To an outsider it might appear that, from the start, a dose of common sense would have prevented the issue ever arising. The HSE practice is to assess first on the basis of suitability for Home Care, and clearly with limited resources and residential care costing so much this is the wise approach – but there are always individual cases where there is need for some flexibility and a common sense approach. This was lacking – shades of the fiasco over withdrawing discretionary medical cards from chronically sick children several years ago.

Still, all’s well that ends well and we have certainly advanced from the Workhouse era. But with the numbers of elderly set to rise sharply in the coming years, the pressures on the system – and its financing – look likely to mount.

16/7

SAILING ON THE TITANIC 1707 CIII

SAILING ON THE TITANIC AND CREATING AN ICEBERG.

As I write June is not even half-over and already there have been events to note.

Leo Varadkar has just been sworn in as Ireland’s fourteenth Taoiseach. He is openly gay and the son of an immigrant Indian doctor, neither of which caused comment inside or outside his campaign to become leader of Fine Gael, Ireland’s traditionally more conservative party – an example of how far we have matured as a society. There has certainly been (much) criticism of Varadkar from outside Fine Gael, but this has been of his perceived conservative positions on economic and social issues. He has already established a reputation as a political bruiser who doesn’t suffer fools or half-baked policies or criticisms. We shall see how he handles the complex business of stewarding a minority government, particularly one with such precarious support.

Any urge he might have to go to the country to seek his own mandate will be tempered by a long hard look at what has been happening in Britain. Prime Minister Teresa May called an unnecessary election for June 8, bolstered by a massive lead in the opinion polls, ostensibly to receive a strong mandate for the imminent Brexit negotiations, and facing a demoralised opposition Labour Party led by Jeremy Corbyn, an unpopular left-wing figure.

Moreover the realities of the electoral structures of the UK political system rendered it just about impossible for Labour actually to win any election on its own; and so it proved. But this was not the story. At the end of the day the Tories lost 13 seats to finish at 318, by far the largest party but tantalisingly short of the magical 328 needed for an absolute majority.

May will now have to enter the most difficult negotiations Britain has had for half a century as leader of a minority government dependent for survival on the North’s Democratic Unionist Party (DUP). However she may package it, the near defeat, even though she almost “won,” has undermined any programme of getting tough with Brussels. And that’s not all. Arguably the coups de grace to her prospects were delivered by two Islamist terror attacks in the last weeks of the campaign, leaving her to defend her own, and her party’s, record on security and with the prospect of having as a priority to take measures to minimise the chances of another murderous attack.

The Tory campaign, solely down to May, who called it and whose chief advisers have already been shown the door, was virtually a textbook example of how not to run an election. Firstly, the timing. As well as getting a strong negotiating mandate, May’s decision was probably motivated to give time post Brexit for the anticipated negative political and economic consequences to bed down with the electorate. It made some sense, certainly, but was a calculated gamble, an unnecessary leap in the dark. Moreover it discounted or ignored the growing post-referendum public awareness that Brexit would involve no easy future and that the Leave campaign had been less than honest.

Secondly the Manifesto, where, again, hubris seems to have played a part, was a disaster electorally. Perceived as an attack on the Welfare State, any welfare proposals were to be financed from savings in welfare elsewhere, including, crucially, from the elderly. Those receiving home care in their homes would henceforth have to pay, if necessary by recouping any monies owed by selling the home after death. Winter fuel allowances were to be means-tested. Elsewhere free school lunches were to be cut. The resulting uproar led to a rapid U-turn by May who promised to have the provisions regarding the elderly – dubbed by the media a “Dementia Tax” – reviewed. By then, however, the damage had been done. The thrust of the measures would be to cut the elderly middle classes – predominantly Tory voters –adrift from much state funding. By contrast Labour’s manifesto, secure in the knowledge that it would never be implemented, proposed a dubiously costed education, health, and welfare spending bonanza, to be financed by increasing taxes on the wealthy.

Thirdly the campaign itself, where May was exposed as a lacklustre performer bereft of charisma. As the opinion polls showed the Tory lead shortening, she seemed unable to respond, her great project – negotiating on Brexit – failing to fire the imagination and generating considerable uncertainly and misgivings about where the process was going and to what end. Corbyn, no great performer himself, nevertheless came across as more relaxed and as sticking to a consistent message. His curious strategy of visiting and speaking at Labour strongholds rather than barnstorming in marginals seemed to pay off; the media showed him addressing large numbers whereas May’s audiences seemed to be small.

Fourthly, the unforeseen. She might still have pulled it off – to the end the opinion polls showed the Tories ahead. But “events” intervened. The terrible mass murder of 22, including children at a concert, by a suicide bomber in Manchester on 22 May shifted the campaign permanently away from Brexit. The new focus was security, an area where May was found wanting and was immediately on the defensive. As Home Secretary for six years – her only previous Ministerial experience – she had presided over the reduction of 20,000 in the numbers of police nationally. Whether the extra police would have ensured protection from a secretive murderous religious zealot is moot; but the issue did not go away. Compared to safety on the streets Brexit was irrelevant.

The London Bridge atrocity just five days before polling day was another hammer blow. Once again terrorists had got through; only the rapid mobilisation of armed police had restricted the slaughter. The unposed, unanswered question was clear. A panicked May spoke of severe new legislation, including curbing some human rights. The election results left her severely damaged politically. She now has to govern from a position of weakness. Most pundits give her six months to a year.

There will be exhaustive analysis of what this election signifies. Labour came to within a million votes of the Tories, recording its second highest total (12,878,985) since 1966. However it would be premature to hail Corbyn as the Second Coming. Certainly more young people voted (Labour promised to abolish college fees), and probably fewer elderly. The UKIP vote collapsed, the LibDems stabilised. Both the major parties secured over 40%, heralding perhaps a return to the traditional two-party system (something else Varadkar should note). Evident was the public fear that the British Welfare state was facing attack from an arrogant, insulated, monied elite. The surge of disillusionment and alienation evident in the Brexit vote has not gone away.

It promises to be hard pounding all round, both in Britain and here, with no honeymoon for the new Taoiseach. When our neighbour catches cold we get the flu. Compounding everything else, the revelation that at least one of the London Bridge attackers had lived and married in Ireland has raised questions about our own security and vulnerability to terrorist attack. It has also focussed attention on Ireland as a safe haven and the Common Travel Area as a potential back door for Islamic terrorists to enter Britain. Big Boys Games, Leo.

END
16/6