Ireland: Government’s 500 billion euros banks guarantee

Joe Higgins lambastes bankers’ greed in Daily Mail columns

The following article was written by Joe Higgins for his weekly column in the Daily Mail (Irish edition) on 1 October 2008

Like a searing scalpel, the dramatic financial crisis of recent days, and weeks, graphically slices through the tissue of establishment propaganda and cant about how this State, and indeed the world, is run, and reveals the bare truth beneath. We live in a dictatorship – the dictatorship of the markets.

During the ten years I served in Dail Eireann [Irish parliament], I made that point more than once, and to a typical response of raised eyebrows, and mutterings of ‘here we go again’. Now we know it’s true.

Sure, we get to vote for Councillors, and Parliamentarians every few years. The four weeks of the last General Election campaign were packed with debate, on the economic policies of the various establishment parties. Strong growth rates, well into the future, were confidently predicted, and many conclusions drawn, for jobs and public services.

Now we know it didn’t make a blind bit of difference. Because, the hapless politicians aren’t the ones who decide. They aren’t in charge. The property speculators, and the bankers are in charge. The spivs, and speculators gambling billions on Stock Exchanges around the world are in charge.

Driven by insatiable greed, their headlong rush for private profit dictates how entire economies are run,and dictates the fate of billions of human beings. And now, like the Gadarene swine of the Christian New Testament, they have taken their system to the very brink of the precipice. Which is now where we find US president Bush, British Prime Minister Browne and Irish Finance Minister Brian Lenihan, desperately trying to prevent them going into the abyss.

As the crisis unfolded, we listened to political leaders here, and elsewhere, without being conscious of it, acknowledge who the real rulers are. They said they were taking far reaching measures, ‘to send a signal to the markets’; ‘to reassure the markets’; ‘to restore confidence in the markets.’ And if these measures weren’t sufficient to reassure, and restore confidence, they took even more far reaching measures to the same end.

So, what are the markets, and who runs them? Put simply, they are like giant gambling casinos. Wheelers, and dealers buy, and sell, everything from coffee, and oil, to ‘packages’ of mortgage portfolios, and debts of financial institutions.

They will gamble on future prices of essentials, like food, and drive prices up, or down, depending on the circumstances. For the most part, they will never see the products they are dealing in. They are utterly indifferent to the fate of those who labour to produce the goods, as they are to the ability of people to purchase them, They are utterly immoral.

These, then, are institutions, and the people calling the tune. And, like mesmerised snakes, political leaders have been responding. They reward them by rescuing their organisations from the consequences of their inordinate greed. They prostrate themselves at their feet, laden down with bulging bags of hardworking people’s taxes.

For the last ten years, the Fianna Fail/PD Government watched, motionless, as property speculators, and big bankers, mercilessly crucified young working people to forty year mortgages, to pay for the monstrous house price rises they had engineered. The Government raised not a finger, as developers walked away with billions, bled from their victims, whose only crime was to seek the human necessity of providing a home for themselves.

Minister Lenihan had the gall to suggest recently that ‘we’ decided we wanted things this way. As if we were masochists loving the idea of working like dogs for decades, to obscenely enrich a tiny minority. Talk about blaming the victims for the crime!

Now, Minister Lenihan gives carte blanche to the major banks. Gambling with taxpayers funds, he underwrites the fat cats, who brought on this unprecedented crisis. No such guarantees for the thousands of workers, who have been thrown out of their jobs over the last months largely because their bosses weren’t making sufficient profits.

The last week has shown, also, that there is no Opposition in Dail Eireann. If you examine the record from last week, which was the first time that the parliament had to debate the momentous events of recent months, and weeks, not a single voice was raised that fundamentally disagreed with the Government’s right wing position. All accept the ‘reality of the market’, and therefore accept being subjected to its madness. In the same way as all will accept what the Government, and Minister Lenihan have done for the big banks.

However, ordinary people should start their own debate. On why their jobs, their need to have a home, and their pensions should all be held to ransom, by faceless institutions in the financial markets, and on the Stock Exchanges . And why instead, these should not be in public ownership, and run for the benefit of the majority rather than the greed of the very few.

Daily Mail, Irish edition (24 September 2008), Joe Higgins column

Seven years ago, when a cabal of demented zealots brought down the twin towers in New York, destroying thousands of innocent lives, the Bush Administration launched two massive wars in response, allegedly to destroy the perpetrators of this threat to the ‘American way of life’.

A few weeks ago, when a cabal of greed driven bankers brought the entire US financial structure to the very brink of annihilation, destroying tens of thousands of livelihoods, and threatening far more fundamentally the ‘American way of life’, the Bush Administration rushed to embrace the perpetrators. The tottering institutions are being shored up by bleeding the taxpayer, and the architects of the disaster are sent on their way, laden down with golden handshakes.

So far no promise of an independent enquiry, as to how things came to this stage. Nor will there be, for fear of what it would reveal, and who it would indict.

The scale of the ideological climb-down by business, and political leaders in the United States in response to the chaos in the world’s financial markets will take some time to sink in. They have taken into public ownership, the two biggest mortgage providers in the United States. Likewise, the giant American Insurance Group. To manage all this, up to $700 billion of taxpayers’ funds are being put on the line.

To appreciate the breathtaking hypocrisy of all this, you need to think back to the philosophy espoused in the 1980s, by Margaret Thatcher in Britain, and Ronald Reagan in the US. To a cacophony of cheers from world business leaders, and media, this duo reviled the idea that government had a social responsibility, to build a society that was fair and equal. The subsidisation of public enterprises, and services was also reviled. Instead, deregulation, and privatisation were to become the order of the day. The forces of the ‘free market’ would be the regulator.

These trends were intensified in the 1990s, after the collapse of the Stalinist regimes in Eastern Europe. Not at all socialist, but based on public ownership of their economies, their demise was supposedly the end of the very idea of a socialist alternative. There was now no alternative to free market capitalism, and furthermore there would be no more crises such as the Great Depression.

This was the background to the presidency of George W. Bush, and the cabal of neo conservatives, who accompanied him to Washington in 1991. They epitomised the hostility to subsidisation of public programmes, and eulogised a market, red in tooth and claw. Until the last few weeks that is, when the market began to disintegrate.

Suddenly, the haughty Chief Executives and billionaire shareholders were transformed into latter day Olivers, with gigantic begging bowls outstretched, for the very public subsidisation which they had so denigrated. And the Bush neo conservatives suddenly had their hearts melted, and rushed to embrace them, meet their demands, and rescue them.

And, what a mammoth rescue! The $700 billion is to take all the bad debts off the hands of the bankers, and manage them as public debt. So, in one week, under the impact of events, thirty years of ideological propaganda was stood on its head. The great privatisers were suddenly implementing the biggest nationalisation in US history. And the State was now recast, as a generous Nanny after all – to the greedy rich.

Socialists have always argued that major banks, and financial institutions should be taken into public ownership, and run under democratic control and management. The logic is that institutions which have such a massive role in the economy, and society should not be the creatures of private interests, driven by the accumulation of private profit. Rather, they should be run in the interests of the common good of society. Furthermore, the huge profits they generate, based on the funds of millions of ordinary people, should be devoted to investment in society, and for social ends.

Calls for public ownership were usually greeted with derision by establishment commentators. Perhaps not so much anymore!

The current chaos on the world’s Stock Exchanges should open up a debate on the funding of our people’s pensions. Whether workers with private pension schemes will be able to retire in reasonable comfort is currently determined by the activities of speculators in the markets. Now, with pension funds ravaged by the crisis, these funds might as well have been gambled at the roulette tables. Is this any way to reward pensioners for a lifetime of work?

The establishment will gloss over the fundamental roots of the current crisis. But ordinary people should begin their own inquiry, by opening up a major discussion, on how the financial and economic structures of our society should be radically transformed, with the driving force being the wellbeing of the vast majority rather than the greed of a very few.