Saturday, November 27, 2010

Irish Eyes Are Crying, Part 9

Meanwhile, Ireland's got a few problems with that whole austerity thing leading to national riots.

After a week that brought Ireland a pledge of a $114 billion international rescue package and the toughest austerity program of any country in Europe, tens of thousands of demonstrators took to Dublin’s streets on Saturday to protest wide cuts in the country’s welfare programs and in public-sector jobs.

The protests centered on a milelong march along the banks of the River Liffey in central Dublin to the General Post Office building on O’Connell Street, the site of the battle between Irish republican rebels and British troops in the Easter Uprising in 1916 — an iconic event that many in Ireland regard as the tipping point in Ireland’s long struggle for independence.

The choice of venue for the protests by the Irish Congress of Trade Unions, coordinating the march through the city, reflected the mood of anger, dismay and recrimination in the wake of the economic shocks of the past 10 days. Those shocks have been the culmination of two years in which the economy has shrunk by about 15 percent, faster than any other European economy.

Before that, Ireland enjoyed more than a decade of unprecedented prosperity, so the rescue package being worked out by the International Monetary Fund and the European Union and the austerity program the Dublin government has been forced to adopt to secure the bailout loans have come as a deep jolt.

Among other things, the austerity package will involve the loss of about 25,000 public-sector jobs, equivalent to 10 percent of the government work force, as well as a four-year, $20 billion program of tax increases and spending cuts like sharp reductions in state pensions and the minimum wage. One Dublin newspaper, the Irish Independent, estimated that the cost of the measures for a typical middle-class family earning $67,000 a year would be about $5,800 a year. 

Again, this is the kind of pain that the Village centrist say we must go through in order to "regain our country".  The problem is this Irish bailout is literally jacking up taxes and killing social spending in order to save the country's bankers.   Remember, it wasn't public debt that was Ireland's problem, it was debt created by the Irish banks to fund their own version of Big Casino.

Before the bank bust, Ireland had little public debt. But with taxpayers suddenly on the hook for gigantic bank losses, even as revenues plunged, the nation’s creditworthiness was put in doubt. So Ireland tried to reassure the markets with a harsh program of spending cuts.

Step back for a minute and think about that. These debts were incurred, not to pay for public programs, but by private wheeler-dealers seeking nothing but their own profit. Yet ordinary Irish citizens are now bearing the burden of those debts.

Or to be more accurate, they’re bearing a burden much larger than the debt — because those spending cuts have caused a severe recession so that in addition to taking on the banks’ debts, the Irish are suffering from plunging incomes and high unemployment.

But there is no alternative, say the serious people: all of this is necessary to restore confidence. 

No wonder Irish are taking to the streets, some 50,000 in Dublin alone.  Their entire economy was screwed over to support the bankers, and the Irish taxpayer is being put on the hook to pay for it.  So not only do they have a recession thanks to the banks exploding, they now have to pay for the banks' mistakes on top of everything else.

Yeah, I'd be pissed too.  And remember...our own political class is expecting us to do the same thing.


Anonymous said...

Wouldn't exactly call it a riot there genius...

Anonymous said...

And remember...our own political class is expecting us to do the same thing.

Uhh, we already did.

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