Ireland in crisis: the stories they're not telling you - by Brian Whelan

Ireland in crisis: the stories they're not telling you


By Brian Whelan

Ireland's economic and political crisis has continued to develop at such a pace that many stories are being entirely missed by the nation's media.

Discontent with RTE has reached a new high after its decision to cut away from a live broadcast on Sunday night when TV3's Vincent Browne began to ask tough questions of the Taoiseach in front of the world's media.

Along with 80 official complaints, RTE's Facebook page has been filled with thousands of comments from angry viewers who say they have been forced to switch to BBC News 24 and Sky News to watch ‘unbiased' reports on the bailout. Some users have gone so far as to liken the state broadcaster to the Soviet Union's official mouthpiece Pravda.

See now: RTE's Facebook page

Former RTE director of television Helen O'Rahilly criticised the station for cutting away during a report on a matter of such ‘historical importance'. They dropped the ball again the following day with no live coverage of the Green Party's press conference announcing general election plans.

An incident later on Sunday night where an 18-year-old Dubliner was knocked down, allegedly by a minister's car, was only considered newsworthy by the Belfast Telegraph. The teen was rushed from the scene to hospital where he was X-rayed for a suspected broken leg.

Read now: Belfast Telegraph




The following day a rowdy protest at Government buildings saw Sinn Féin supporters enter the gates, only to come under attack from baton-wielding motorcycle garda.

What the garda may have failed to notice while striking out and grabbing one protestor by the throat, is that he was manhandling Aengus O'Snodaigh, an elected member of the Dáil who should be free to pass through the gates as he wished."

Deputy Ó Snodaigh can be seen in footage broadcast by the BBC and later spread across YouTube trying to calm the situation and move the protestors back outside the gate for their own safety.

While Green Party TD Paul Gogarty's bizarre decision to bring his child to the Green Party press conference on Monday was the subject of lively debate on Liveline yesterday, many news outlets missed the storm he has been creating on Twitter.

While the nation was falling into economic and political chaos, deputy Gogarty was using his Twitter account to bicker with members of the public, who were calling on him to pull out of government.

The deputy's tweets have provoked much controversy, not least because he has chosen to block scores of critics - including high profile reporters, elected representatives and academics.

David Cochrane, head of the politics.ie discussion forums, came in for particular scorn, being dubbed ‘master of the online pit of scurrilous vipers'.

See now: Paul Gogarty's Twitter page


Many Internet users are outraged at the ‘failure' of RTE to be critical of the government's bailout plans and have begun to distribute articles from smaller news sites and even foreign newspapers via social networking sites.

Dean Baker, writing in the Guardian, has suggested Ireland learn from the lesson of the IMF's involvement in Argentina and make a break from the euro, stating that if Ireland ‘plays by the bankers' rules, [it] will lose'.

Read now: The Guardian

Meanwhile Matthew Lynn, writing for Bloomberg, believes that Ireland would be better off going bust rather than taking a loan, as the conditions attached ‘aren't worth it'.

Read now: Bloomberg

Veteran reporter Vincent Browne has called the government a ‘junta' led by an ‘IMF minder' and claims ‘Saving banks to pursue a low-paid jobs policy is par for the course given the dysfunctionality of our rulers' ideology'.

Read now: Politico

These critical opposition voices are missing in a country where the debate is reduced to guessing how long the current government will last before the next government steps up to implement the IMF-led cuts in a nicer way.

This Friday's by-election will act as a barometer of the nation's mood, but surely the biggest test will be the ICTU march on Saturday, where the countless armchair critics who demand ‘why is there nobody on the streets' will have their day.

The Technical Engineering and Electrical Union have now officially called for ‘civil disobedience' to bring the government down and hope to build on this weekend's protests. Their general secretary has declared ‘we are on the brink of significant civil unrest in this country'.

Read now: The TEEU site

The only protest being mentioned in the media however is a ‘silent protest' organised by a comedian via Twitter, where people are urged to bring placards telling the government they're fired - though this is surely missing the point that if they were listening to public opinion they would have fled weeks ago.

On the other end of the spectrum the emergence of a new right wing grouping in Ireland has failed to inspire much interest. It brings together economics journalist Marc Coleman, former Libertas PR man John McGuirk and Iona Institute director David Quinn.

The group hopes to end civil war politics and introduce a European left-right political system here and despite their unfortunate name - National Alliance - they are progressive right unlike their extremist ‘white power' American namesakes.

Read now: National Alliance

Are you fed up with how the country is being run or how the bailout is being reported?
We are and thats why we welcome the formation of the United Left Alliance.......

March to GPO against the IMF/EU Sellout and Cuts. Sat 27th Nov.

This march is supported by a wide range of groups. Please come out and show your support! Assemble 12 noon, on November 27th at Wood Quay, Dublin The ICTU have called for the march on Sat but it is only on the basis of 'fairer' cuts. But we shouldn't accept this. See the statement from the 1% Network on the analysis of the problem. It would seem the unions were co-opted long ago and serve to allow political pressure to be vented safely by making token gestures of opposition. Ignore the govt spin that tries to focus on those relying on social welfare or those working in the public service. These are all designed to redirect the focus and anger away from the bankers, developers and speculators and challenge it amongst the masses to prevent any fightback. "Fascism should more properly be called corporatism because it is the merger of state and corporate power." - Benito Mussolini..

Ireland-ECB's sacrifical lamb to assuage German inflation fears..

I know, I know.....the Torygraph is just flexing its eurosceptic muscles with this piece, apparently bemoaning Irelands lot, but this does not mean that the argument being advanced does not have any intrinsic merit. Far from it, put bluntly, Ireland is being forced to roll back the welfare state and tighten fiscal policy in the midst of a savage economic contraction in order to uphold the deflation orthodoxies of Europe's monetary union.

(SUNDAY TELEGRAPH 12.4.09)

If Ireland still controlled the levers of economic policy, it would have slashed interest rates to near zero to prevent a property collapse from destroying the banking system.

The Irish Central Bank would be a founder member of the "money printing" club, leading the way towards quantitative easing a l'outrance.

Irish bond yields would not be soaring into the stratosphere. The central bank would be crushing the yields with a sledge-hammer, just as the Fed and the Bank of England are crushing yields on US Treasuries and gilts.

Dublin would be smiling quietly as the Irish exchange rate fell a third to reflect the reality of trade ties to Sterling and the dollar zone.

It would not be tossing away its low-tax Celtic model to scrape together a few tax farthings - supposedly to stop the budget deficit exploding to 13pc of GDP this year, or 18pc says Barclays Capital. If the tax raises were designed to placate rating agencies, they made no difference. Fitch promptly booted Ireland from the AAA club anyway.

Above all, Ireland would not be the lone member of the OECD club to compound its disaster by slashing child benefit and youth unemployment along with everything else in last week's "budget from Hell".

Depression buffs will note the parallel with Britain's infamous budget in September 1931, when Phillip Snowden cut the dole and child allowance to uphold the deflation orthodoxies of the Gold Standard - though in that case the flinty Pennine rather liked hair-shirts for their own sake.

Though few had any inkling at the time, Snowden's austerity drive would soon push British society over the edge. It set off a mutiny - a Royal Navy mutiny at Invergordon over pay cuts, in turn triggering a run on sterling. The pound was forced off Gold within days. Irish deliverance from EMU will not be so easy.

Brian Lenihan, Ireland's finance minister, said the economy would contract 8pc this year on top of the terrifying 7.1pc drop in the final quarter of last year.

But what caught my ear was his throw-away comment that prices would fall 4pc, which is to admit that Ireland is spiralling into the most extreme deflation in any country since the early 1930s. Or put another way, "real" interest rates are rocketing.

This is torture for a debtors' economy. You can survive deflation; you can survive debt; but Irving Fisher taught us in his 1933 treatise "Debt Deflation causes of Great Depressions" that the two together will eat you alive.

Don't blame the victim. Ireland has been betrayed twice in this saga. Once by New Labour, which led Dublin to believe that Britain would join EMU at the same time - covering Ireland's dangerously exposed flank of Sterling trade.

It was betrayed again by the European Central Bank, which opened the monetary floodgates early this decade to nurse Germany through a slump, holding rates at 2pc until late 2005, despite flagrant breach of the ECB's own M3 money targets. Fast-growing Ireland and the Club Med over-heaters were sacrificed to help Germany. They were left to cope with credit bubbles as best they could.

Ireland struggled. Construction reached 21pc of GDP - a world record? - compared with 11pc in the US at the peak. Mr Lenihan hopes to shield banks from the calamitous consequences by creating a buffer agency. It will soak up ¤80bn to ¤90bn in toxic debt - or 50pc of GDP.

He borrowed the plan from Sweden's bank rescues in the early 1990s, but overlooks the key point - it was not the bail-out that saved Sweden's financial system, the country recovered only by ditching its exchange peg and regaining its freedom of action.

Without that sort of liberation, Ireland's property slump will grind on for years and more multinationals will join Dell in decamping to cheaper plants in Poland. Ireland risks a deflationary slide into bankruptcy.

Of course, it is not the job of the ECB to set policy for Dublin's needs. But it would at least help if Frankfurt began to set policy for Europe's needs. Has the ECB noticed the collapse of industrial output in Spain (-24pc), Germany (-23pc), Italy (-21pc), France (-14pc)?

Simon Johnson, the IMF's former chief economist, said the ECB is pursuing a "ruinous policy" by disregarding the clear and present danger of deflation. "If they wait until deflation is 'fully in the data', it will be too late," he said.

Spain is already tipping into deflation. Unemployment has reached 3.5m or 15.5pc, and is rising very fast. Finance minister Pedro Solbes - ex-Mr Euro and lately the Torquemada of Madrid life - was toppled last week in a bitter dispute over spending plans. He said the kitty is empty. Quite. But is his fall a sign that Spain is no longer willing to follow the Frankfurt deflation script?

France too is fraying. The over-valued euro - fruit of ECB doctrine - is hollowing-out core industry. This week ArcelorMittal mothballed its historic foundries in Lorraine in what looks like the final demise of French steel. Workers are taking matters into their own hands everywhere, holding managers hostage in what amounts to low-level terror tactics.

No doubt, Germany will recover. Its export machine is heavily geared to the global cycle. Southern Europe will not recover. The cost gap between North and South has grown too wide. Which is why the ECB's deflation policies must prove so destructive.

If the ECB continues to serve as the instrument of German tastes, keeping German inflation near zero, then Club Med and Ireland must necessarily deflate into Hell with all their debts. Unless Germany accepts inflation of 4pc, 5pc or 6pc for a while, the only way the South can claw back lost competitiveness is through outright wage cuts, and that is not a macro-economic option for debtors. Is anybody facing up to this core reality in euroland?

Ireland prides itself on a nimble workforce and flexible practices that make it different from Club Med. It can adjust faster to ups and downs, goes the story. For those of us who feel a duty to Ireland, let us hope this, at least, is true