Front Page of the german Newspaper Süddeutsche Zeitung 2009/05/20 (Photo credit: Wikipedia)
If you care – or are just curious – about what’s happening in Ireland now, economically and politically, you could do a lot worse than ask a German. Not any German of course, certainly not Angela Merkel, but one Christian Zaschke, who wrote an article for the Süddeutsche Zeitung aptly titled “Conned“. (Translated and republished here by the Irish Times.)
In it he makes a clear connection between Ireland’s erstwhile banking and future oil wealth. One has the potential to provide a solution to the problems created by the other, but it’s likely to be stolen from us just as the first was, and by the same route: Corruption. More precisely, our strange pervading acceptance of that corruption.
Is this over-simplistic? No, it’s just refreshingly direct. We may wish to say in reply that it’s more complicated. We may be deeply intellectually concerned here with the reasons behind why we are so supine in the face of corruption: colonialism, Catholicism, conformity, clientelism, Celticness, corporate capitalism – that’s just the Cs – but it really doesn’t matter what the cause is. The important thing is that we are being supine in the face of corruption. We need to stop.
Anglo Irish Bank in New York (Photo credit: Wikipedia)
David Drumm, former Chief Executive of Anglo Irish Bank, still protests that there was no deliberate misleading of the government. In this interesting interview with Irish Central he claims the bank was not trying to hook the State into open-ended support, despite what the tapes may have suggested. And by suggested I mean “said aloud”. What’s surprising is that he actually does come across as innocent.
And by innocent I mean “having the intellectual capacities of a child”.
He claims that all Anglo ever wanted from the government during the market storm that followed the collapse of Lehman Brothers was a single little shot of €7 billion to keep it liquid – I quote – “assuming the financial markets crisis returned to normal at some point in the near future”.
We do all know of course that this storm was the financial markets returning to normal. The period before that, when banks like his made billions simply by driving up the price of houses and pouring massive piles of credit onto anyone who stood still long enough, that was the abnormality. The cash equivalent of a screaming drunken spree with an open bottle of whiskey in each hand is the normality he is referring to here.
Anglo, he’s saying, just needed a few billion to tide it over until things became unsustainable again. He cannot of course have been stupid enough to believe that was in any way realistic; it was just the line of bullshit that they had to take in a desperate bid to survive. What surprises me is that he’s stupid enough to think we’re stupid enough to think he really believed it.
Mike’s interests include prayer, gardening, mystical visions, what you do in private, and running for President. (Photo credit: Wikipedia)
Mike Huckabee is sending me email. Why, I don’t know. I could not care less what the man thinks. Calls himself a “Conservative Christian”, which apparently means that he was enjoying the Bible right up until Jesus came along and spoilt it. Mike wants me to know that a bunch of people in robes are not more important than God. This isn’t an anti-Islamic thing, he’s referring to the US Supreme Court and their judgement that some laws against Gay marriage were unconstitutional. He argues that they must be wrong because his God doesn’t agree with Gay marriage. This shows that he either doesn’t understand or doesn’t care for the constitution of the United States. Both, I suspect.
So I’m not an American voter. Was this sent to me by mistake? I get mail intended for other Richard Chapmans (Richards Chapmen?) all the time. I’m not sure; American conservative Christianity is not just a mixture of politics and religion. It’s also a business. Witness the fact that a while after this, along came another mail from Huckabee. Only this one began “Please find a special message from our paid sponsor”. Mike Huckabee’s political spam has breaks for commercials.
(Incidentally – “paid sponsor”?)
It was headed “Sopranos Star Ignored 4 Signs of Imminent Heart Attack, Doctor Says”, and was designed to terrify you into some dubious heart-health scheme by quite literally cashing in on the recent death of James Gandolfini. Classy. Interesting to note though, Outlook’s filters decided Huckabee’s advert wasn’t spam – but that his politics was. I think I see where they’re coming from.
My favourite bit:
Dr. Crandall says that if you ever suffer a heart attack outside of a hospital, you only have a 7 percent chance of survival!
That also means in 93 percent of the cases such an episode is fatal!
No comment of mine could add to that in any way.
Yes, all organised religions from Scientology on down are commercial entities. But the US religious right, seeing as it does no real distinction between Christianity and Capitalism, is among the least embarrassed to blatantly seek “customers”. These don’t necessarily have to be American voters as long as they can raise the funds and spread the programme. Witness “our” Youth Defence, in many ways a bridgehead into Ireland for American Conservative Christianity. (And one to which an outflanked Catholic Church has still to find an effective response.) So there’s every possibility that this mail reached me intentionally. Pointlessly, but intentionally.
So the “Anglo Tapes” – internal phone recordings made during the last days of Anglo Irish Bank. Do they constitute a smoking gun?
Hoo boy, you betcha. A smoking gun, covered with bloody fingerprints, with a note taped to the barrel saying “For doing the murder with”.
This is the stuff.
I have to admit I was a little dismissive when I first heard of this, much as I couldn’t quite believe all the fuss over the PRISM revelations. (“You mean you believed US intelligence forces didn’t spy on whoever the hell they liked?”) We all knew that Anglo had ripped off the nation. Had, as the Indo bluntly put it, “cost Ireland our sovereignty“. But we also knew it was done with nods and winks and complicity, screened off by tendrils of loyalty and friendship. These people don’t leave evidence.
But that really seems to be what we’ve got here. The tapes record senior – very senior – management explaining a strategy of lying about the severity of the bank’s situation. They knew that if they revealed the full picture, government would see little alternative except to let the bank fold. They cynically calculated that if the State was tricked into giving a few billion of support at first, it would be forced to follow up with more and more in a frantic effort to save its investment. Which is precisely what happened.
They cheated the State in order to try to save their wealth and positions, cheated it of billions and billions. And when I say the State of course, I mean you and I. People who pay tax, people who rely on the State to support and protect them. Everyone in the country, in other words. We were all robbed by this, quite deliberately.
We shouldn’t oversimplify. This doesn’t let the other lenders and speculators off the hook for stoking the property boom, exonerate the politicians in Fianna Fáil (and elements of the media) who were complicit in the bubble, or mean that the euro was not grossly mismanaged. Anglo’s rooking of the public was certainly not the only cause of Ireland’s economic demise. But these men tricked the country into taking on billions and billions in debt. Billions that could have gone to creating jobs or equipping hospitals.
And there are tape recordings of them saying how they did it.
One does not want to prejudice any possible legal proceedings, so to be circumspect… Wait, what was that? Sorry, I thought I heard something. Probably thunder. Though it sounded even more like a long corridor of cell doors clanging shut.
Ireland is the success story of austerity, the figures prove it. According to the IMF, the domestic economy grew 2.38% over 2010-2012. The bitter medicine is working. Soon we’ll be able to borrow on the markets again.
Yay.
But even the IMF admits it got it wrong in Greece. Severe austerity there has only deepened recession and dashed any hope of quick recovery. Yet somehow the very same policy seems to have worked in Ireland. Mysterious.
Hold on. Is this not the same Ireland that was recently called a tax haven in the US Congress? A country that – there is no secret to this – encourages transnational corporations to declare their profits here instead of in
other, higher-taxing jurisdictions. How much of our apparent growth, touted by our EU partners as the fruit of prudent austerity, is actually owed to what we might call the Tourism For Your Taxes sector?
Every damn bit of it.
Discounting the money-shuffling activities of transnationals, the domestic economy in Ireland declined by 5.2% between 2010 and 2012 (Source: Dr. Constantin Gurdgiev). The real economy – the one in which people who actually live here have to work and buy things and pay their (much higher) taxes – is one of closing businesses, joblessness, emigration, debt. Austerity as it actually works.
This presents an interesting conundrum for our EU partners. They wish both to use us as proof that austerity works, and to condemn taxation practices that are patently ripping them off, all the while maintaining the cognitive dissonance necessary to avoid acknowledging a causal connection.
As far as we can ascertain, this is all Apple actually made in Ireland
No.
OK maybe I should expand on that a little.
Hell No.
All right, let’s break it down: Should Apple and Google pay more tax?
Yes.
Should they pay that tax in Ireland?
Should they shite.
They ought to be paying the tax in – ooh, I don’t know – the countries where they actually owe the tax? The places where they did the work and made the profit. As opposed to giving it to us for letting them pretend they do their business here. Apple and Google are not the only examples of this of course, and I’m sure that they’re far from the most egregious. They do actually do some stuff here, unlike hundreds of companies that have their brass-effect plaques in the IFSC. But they are immensely profitable and we are helping them keep more of those profits for themselves. For a cut.
There is nothing fundamentally wrong with offering a slightly lower rate of corporate tax to attract business, especially if it’s a loss you’re willing to take in order to compensate for another disadvantage – a fairly peripheral location, for example. It could, and I’m sure it once did, attract people to do real business and create real employment here that they would not otherwise have.
But when the rates are so low that they tempt corporations to just start trucking money through the country, and when we provide them with “pro-business regulation” that doesn’t check excessively carefully to make sure all that money is really being made here, then we are stealing. It’s as simple as that. Those companies should be paying taxes to the people of other countries, but we’re taking it.
And ultimately, it does us no good. Just look. This easy-money attitude helped create a soufflé economy that grew and grew and grew until it wasn’t there. Some people made billions out of it of course, but all most of us have to show is debt, negative equity, unemployment.
To this we can add international pariah status. Did you not notice Eurovision?
So now we begin again. What if we try to rebuild the economy on radical principles – like proper regulation, reasonable taxation, and actual value?
Love it. It neatly captures the Catholic Church’s schizophrenic morality. Insinuating itself into public and private life, offering its creeplove salvation.
The “Sindo” by the way is the Sunday Independent newspaper. They like to run polls. I seem to have voted in one just now by clicking on a link in fact. At least it thanked me for voting – I still don’t know what the question was. So I wouldn’t give too much weight to the results, I don’t think 22% of people today would really prefer a woman to die than have an abortion.
House prices in Ireland as a multiple of average income. (Source: Morgan Kelly, Finfacts.ie)
Somebody on the radio saying they’re going abroad to declare bankruptcy. A different holiday idea I suppose. Naturally others soon phoned in to object to this “moral hazard“, as the banks would like us to call it. It was wrong they said to walk away from your mortgaged home just because you owed more on it than it was worth.
That got me thinking about what debt actually means. Is there a moral obligation to repay?
Well of course there is. It’s a matter of trust, which is what morality is basically all about. If you’re in a business, you were given materials and help by your workers and suppliers. You are obliged to pay them so they in turn can pay their helpers and suppliers and so on. The wheels of the economy keep turning and everyone gets fed. A financial debt is a promise like any other.
However there is one important qualification. You are only indebted when and if you actually receive something.
The banks will argue of course that they gave you money when you signed that mortgage so you are obviously obliged to repay it, along with the agreed interest. But the thing is, did they actually give you money?
No. They never gave it to you, because they never had it to give to you.
I don’t mean they didn’t have it in their vaults; we all know that’s not how finance works. All loans are borrowed, when it comes down to it, from the future. They’re based on the reasonable prediction that most of the time they will be paid back in full and with interest. But when the banks decided instead to start making ludicrous loans for several times the value of the houses they were raised against, thereby further escalating the price of housing and so allowing them to offer even bigger loans, they knew that ultimately the whole thing had to blow up. The loans were fake. There was no money in the future to borrow from.
When the inevitable crash came the banks of course had a parachute: They were too big to fail – or so at least they managed to convince themselves. And with themselves convinced they had little trouble convincing the political parties they were going out with – who effectively promised that they would make this impossible future money somehow magically become real money.
Or to be precise, they promised that we would.
The money you seemed to get from the bank ultimately came therefore out of your own pocket. You were tricked into lending it to yourself so that they could take a cut. It’s immoral to stop repaying that? It’s probably immoral to keep going.
The surprising result of neo-liberal economic policy – massive public debt.
Besides, you will only be a little ahead of the crowd. It should come as no surprise that even with all of us working together we can’t actually afford to turn the banks’ lies into reality. The State itself is going to default at some point. That is as inevitable now as the property crash was. Our public debt is soon going to be 200% of GDP, and the harder we try to pay it the less we will be able to; we are being crushed in fact by the burden of trying. Actual people being crushed, by imagined money.
What is this? Pretty sure this wasn’t on the form before. Is this something I need to know about? Who are “High Income Individuals” – and why do they get their own special forms? What the hell is “Restriction Of Reliefs”? It sounds like something you pay for in a PVC-themed night club.
It’s that time of year again. The time when I do my taxes. Yeah, I know it’s not the time you do your taxes, but it is the time I do mine. About six months late, on average.
Once again, we open the form all a-tremble, excited to see just how many wholly indecipherable questions – perhaps entire pages – they’ve added this time. It’s not so long since they re-formed the form for the self employed so that non-accountants could read it. Year on year since though, entropy has dripped back in. A clause here, a category there, and now about 90% of it doesn’t even seem to apply to me. I guess some people’s businesses must be very different from mine, making very different things.
Money, to name one.
At least the online version has asterisks to mark the required fields. I figure I can’t go too wrong if I just fill all those. Then I scan for places to put in expenses and allowances I can apply for. Did you know by the way that if you are getting any form of social welfare payment you are entitled to a PAYE tax credit on top of your normal tax free allowance? I have no idea why, I can only guess it’s because tax is deducted at source from welfare payments – in some sort of entirely notional way. Anyway, ours is not to reason why, ours is to remember to tick the box. It may come in useful if they disallow some of my larger expenses again.
Antique erotic netsuke are research materials, dammit.
While getting my tax affairs in order, I remembered that I’d received an email from the new Local Property Tax agency. We didn’t use to have any residence-based taxes in Ireland, a Fianna Fáil government abolished them one time in a spree of vote-buying. Now that another FF administration has driven the economy off a cliff we have to have them back – though of course it’s the parties now in power that get the blame for it. Political lesson: If you create the most mess, nobody asks you to clean up.
Anyway I hadn’t paid much attention to the email. It’s a tax for property owners and I don’t own any property, I just rent a small apartment in an old four-storey building in the middle of town. Reading it now though, I find that seemingly I do. According to “our records”, as the tax people put it – by which I think they mean a hat – I own the building. Not just the room I live in. The whole. Fucking. Building. Walls of solid stone four feet thick, older than the United States, a good restaurant downstairs. According to an official government agency, it is all mine.
I tell you one thing, I’m not paying any more rent.
So the “Anglo Tapes” – internal phone recordings made during the last days of 
Ireland is the success story of 
