The road from perdition

A YEAR AGO today, I promised that I would return in a year and evaluate the claims made by the yes side in the second Lisbon referendum, and the state of the country generally. Thanks to TheJournal.ie, here are my thoughts, if anybody cares to read them.

In the past few weeks I saw off a friend in rural Galway who has departed to Australia, with his wife and young children. He was a good and decent man, a hard worker, a saver with a loving home. He never drove a sports car or had apartments in Spain, but he just couldn’t keep it going here anymore.

Watching this is breaking my heart. Like many people, I’m sitting near numb as my country is driven into the ground, her children into exile and her future sold to those that should have been forced to eat their investment failures.

One year ago last week, Pat Cox took to the back of a lorry on Merrion Square and unveiled a billboard that framed the choice that the Irish people faced in the imminent re-run of the Lisbon referendum. A signpost pointing us to two possible destinations – recovery, or ruin.

With a political gun pointed at their heads by the three main parties, most media, and a range of lobby groups, the Irish people voted in what they believed to be the national interest. Blinded by fear, they had not noticed that the entire political establishment, like a bunch of drunken student pranksters, had flipped the sign around before showing it to them. One year on, we are closer to ruin, and farther from recovery, than could have been imagined possible.

One of the roles of failure, both in nature, and economics is to clear away the dead wood, and provide the space for fresh growth and regeneration. We live in a country with a gangrenous banking system, but rather than amputating it, we’ve chosen to keep their corpses on life support. We are allowing their poison to tranfuse freely into the rest of the economy, and it is a serious mistake.

In the Irish case, we have abolished the freedom to fail for the very group of people who have wreaked the most harm on our economy. Ordinary people are finding their businesses and their jobs failing every day, and they are being forced to start over and begin again. But our banks? Our political ‘establishment’? Are they taking this pain?

No. While very many young families with large mortgages are reduced to having to borrow a few Euro from their aging and worried parents just to make ends meet, the government has its hand in our pockets, taking from us and giving to people most of us have never met, and who don’t care about our country, or community.

By 2014, according to Dr. Contstantin Gurdgiev of TCD, every single citizen’s share – from infants to grandmothers – of our overall national debt will be €51,830. That figure does not include the billions taken from the national pension reserve fund to further prop up the banks. Our Government is willingly going down this path, and this is the price you will have to pay. It is madness.

Does anybody think that the old arguments that the “costs of borrowing will explode if we do nothing” hold any credibility when the costs of borrowing – if it is even available any longer – have exploded anyway? The only difference is that the amount borrowed is much more – and the cost is higher than that of Iceland, which did nothing. And yet Lisbon was supposed to save us from Iceland’s fate.

This philosophy of government has failed utterly. We now have the spectre of the EU Commissioner telling us that we must become a high tax economy – instead of being free to focus on growth and renewal. A whole generation instead condemned to stagflation and depression.

Businesses cannot grow when they are facing higher taxes to pay debts for banks who will not lend back to them in turn. A healthy property market cannot grow when the Government insists on drip-feeding repossessed properties onto the market over the course of a decade. That is a recipe for a depressed market, artificial interference, and stagnation.

Our political leaders have lost their senses. The current crop of politicians are treating us, and our children like a limitless credit card. They simply do not believe that it is your money, to them, it is all theirs, and it is merely a matter of deciding how much you get to keep. They are committed to the idea that they can fix everything that they have broken, and that they can force the markets to do their bidding. Nature, and the world, is laughing at them.

We now have a choice. We can stay on the track now supported almost completely by the entire political establishment, or we can embrace an alternative.

A growing economy will raise revenues, and decrease welfare expenditures. The best way to lower the structural deficit is not by squeezing more out of a shrinking pie, but by baking a bigger pie. We need a government that focuses all of its energies not on creating jobs, but on helping those who do. Instead of raising corporate taxation, we should be cutting it further. Instead of learning the false lesson that we did not have enough regulations, we should realise that the truth was that we had bad regulators.

There is nobody who seriously argues that the Government did not have the tools to control the banking system – we all know that it simply did not have the competence. Yet we have a Labour Party that thinks that the lesson of the bust is that it should be harder to do business, not easier. If anybody thinks that swamping our private sector with more red tape is the way out of this crisis, well. They are just wrong. It has never worked. Anywhere. Ever.

We need confidence and faith – not in politicians, but in ourselves. Enda Kenny will not restore this nation to greatness, and we all – even those young Fine Gael supporters and TDs who do their duty to their party ably – know it in our hearts.

The Labour party, cynically, used a builders helmet in their Lisbon jobs posters. Eamon Gilmore is now a spokesman for the people’s anger. But we cannot shout ourselves out of this crisis, nor can we tax our way to jobs, or regulate our way to recovery. In one of his wiser moments, it was Churchill who correctly said “the man who thinks he can tax his way out of a recession is a man who thinks he can stand in a bucket and lift it by its handle”.

To complete our tour of the country’s prospective leaders with Brian Cowen – well. Brian Cowen is a tragic figure at this stage, along with much of the dead wood that sits around his cabinet table advising him to carry on.

There is no party with a vision for economic growth in this country. Sure, there are those with a hodge-podge of ideas – most of which involve more government spending and more government interference – but there is no party with a vision. No clear set of ideas that lay out where we want to be in 20 years and how, by working as a community, we can get there.

We made a mistake a year ago, when we allowed ourselves to be scared by predictions of doom. Predictions of doom are the stock in trade of the Irish establishment. They do not like your instincts, so they scare you into submission. Well, this time, it wasn’t the bogeyman de jour that got us here – it was them.

They will tell you that letting bondholders get burned would “ruin ireland”, just as they told you Lisbon would bring jobs and get us off this road. They will shout phrases like “systemic importance” at you when in your heart you know that the only thing which is systemically important is our confidence in our own ability to get ourselves out of this mess.

And so, instead of voting for real reform – reform that could have addressed Europe’s long-term cultural, economic, strategic, and demographic challenges, we voted for a fudge. We were told it would make the EU more democratic – but we are still being lectured by unelected commissioners. We were told it would speed up decision making, but we still have the spectacle of a Europe unsure of how to move forward, and being taken less seriously by existing and growing powers. We were told it would protect our interests, but we are more exposed than ever. This is what happens when we let others shape our future, instead of seizing it ourselves.

So, for my small part, I would appeal to our people to stick around, and to talk to their children.

Tell them we have a hard but exciting road ahead.

That we have to make changes. That we will help our family and our neighbors where they need help, in the way our grandparents before us did.

Tell them to work that bit harder, that we have to be better than the kids going through Eton and Harvard and all the elite schools of China and India, that to survive and succeed, we will need to have the edge, be that bit better.

And tell them that giving more of their money to government is most often not the best way to help themselves or others. Tell them that the people who are the most careful about how they spend their money are those that earn it by their own sweat, never governments. Tell them that they are their own best hope.

For myself I’ll draw some inspiration from the cry that once was heard across these Provinces, but is now rarely uttered by those that have forgotten where we came from:

God Save Ireland. Its going to be a mighty task. But Ireland, with our deep roots and proud history, is able for it.