Slí Eile: There is an urgent and unavoidable need to generate hope at this time. In a previous blog here, there is a series of principles which need to be debated. Too many people are losing, not only their business, their jobs and their homes but too many are losing all hope for themselves and their families. We are in danger of talking and thinking ourselves into a deflationary trap brought on by an imbalanced public debate in which TINA (There-Is-No-Alternative) is dished out 24/7 to a public that has many very angry and very fearful individuals, groups and communities.
Any international agency, Government or partner to the process of consultation and deliberation which grew up over the last 20 years needs to reflect on the long-term economic, social and personal risks in pursuing a very partial and extreme response to the current economic crisis. In the stampede towards ever-rising house prices, incomes, tax cuts and conspicuous consumption for sections of society many of us started thinking or assuming, implicitly, that this could more or less go on indefinitely (soft landing accepted). This was dangerous. It typifies the bad effect of ‘group think’ dished out in big Property Supplements, wages-chasing-house-prices spirals, inflated salaries for top execs entitlements culture. Individuals stepping outside this group think were treated as pariahs and eccentrics in some cases. All that hubris and false confidence has, suddenly, given way to denial, shock, anger, fear, paralysis and a deadening hopelessness and passivity in the face of the economic and political onslaught unleashed by the Great 2008 Recession. Now, we have a continuation of ‘group think’ in the opposite direction.
The first principle of any economic and social recovery is a recovery of TRUST and COOPERATION. Informed by the values of democracy, solidarity and equality I would argue that we need a new Social Solidarity Pact to replace Social Partnership in its recent form. While there are sharp and seemingly irreconcilable positions adopted by various partners from ISME to ICTU to IBEC to others, the situation now calls for courageous and imaginative leadership from all progressive forces committed to rebuilding a new Ireland and one where common interests can be identified. Part of this must involve ‘doing no harm’ There is a real danger that fiscal stance, uniquely in EU terms, will go overboard in the coming 24-36 months as additional cuts will drive up unemployment, further erode tax receipts and barely make a dent in the overall fiscal deficit (indeed as pointed out on numerous occasions on this website the deficit keeps rising above the anticipated level as each fiscal correction takes its toll on consumer income and confidence).
2 comments:
...And has been pointed out elsewhere borrowing ever increasing amounts of money to maintain spending at unsustainable levels relative to our tax base is deflationary too because the money has to be paid back. That is of course we dont default first under the mountain of extra debt that would result. We are as Krugman put it "witout options"
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