Archive for October, 2008

Fascists Attack Students in Rome

October 30, 2008

The wonderful Silvio Berlunsconi heads a government which has just introduced swingeing cuts to the education system, savaging the education system at primary and tertiary level. One billion Euro is to go from the university budget in 2010 alone. Graduate research will be hit, staff levels be cut, and the heads of the universities are warning that the whole system may collapse. Primary school children will get only 24 hours’ teaching per week, while the aim is to sack over 100,000 teachers and support staff.

Naturally this has provoked protests among a wide section of the Italian population. A peaceful demonstration was held by students tonight, but came under organised attack by fascist elements (delicately described as right-wing by the Daily Telegraph) wearing motorbike helmets and armed with clubs and chains. At this point we should remember that Rome has an elected fascist mayor who was involved with fascist terrorist movements in the past, and that Berlusconi’s government contains such elements. Italians learn nothing about C20 history in school, and we can see the outcome in the attacks on the partisans of World War II and events such as this.

Oh, and did I mention that immigrant children with insufficient Italians are to be herded into educational ghettoes? What a lovely government the Italians have. And it is also worth noting that the Daily Telegraph’s headline is students riot in Rome. I wonder which side they are on?

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Lufthansa Buying BMI. At what cost to Belfast?

October 29, 2008

Lufthansa is buying BMI, making it the second largest carrier at Heathrow. So what we may think. However, timeslots at Heathrow are extremely profitable, and we already saw several years ago British Airways pull out of Belfast to use the timeslots at Heathrow for other routes. The danger is that this will happen here, driving up the already increasing price of flying to Heathrow from Belfast City. This is an issue that the Stormont Assembly, the political parties, and the public must begin to lobby on straight away to ensure that the same thing does not happen.

Students pay the price for bad government maths

October 29, 2008

English students are to find the grants to which they are entitled cut by over £500 next year after the government – to quote George Bush – misunderestimated the number of students who would be eligible for the full grant. Instead of the anticipated 33%, 40% are eligible. Although the government is not cutting the full grant to those from families with an income below £25,000 per annum, the grant cut off point will be cut by £10,000 to £50,000. 10% of students will be affected. The shortfall in income is £200 million. Once again we see the gap between New Labour’s rhetoric and its reality. Talk of one in two going to university allied with the introduction of fees. £200 million seems a lot of money. But it probably wouldn’t buy you the Chelsea football team, and certainly wouldn’t pay the bonuses of financial speculators who have already been rescued by the taxpayer.

As can be seen in both the Republic and Italy as well as Britain, the education sector is an easy target for cuts, revealing the short-termism inherent in the current centre-right thinking (if that’s not too strong a word) prediminant across Europe.

UPDATE: The National Union of Students’ not very inspiring response is available here, as is a report it has produced on the funding of higher education generally.

A truly integrated travel plan

October 28, 2008

Travel strategy is an important part of trying to address climate change, as well the quality of life of those who have to get to work during rush hour. Anyone who has spent any significant time in Dublin knows how bad it is when the transport system is totally inadequate to the needs of those who use it. Some time back Conor Murphy, who has been doing a fairly competent job, announced an integrated travel plan designed to ease congestion, protect the environment, and facilitate those who have bought houses and flats in and around Belfast and elsewhere in getting to the work that pays their mortgages. A fine plan it was too, if giving too much prominence to cars. Central to transport strategy before and under Murphy has been investement in the much-neglected railways. Imagine the near incredulity then with which I read on the BBC website that consideration is being given to ending Sunday trains.

I’m fairly sure this is an attempt to wring extra cash for the railways rather than under serious consideration, though it does not breed confidence in the transport system, nor in the commitment to green policies we have heard a great deal about. You do wonder sometimes what is wrong with some people. Then again, we have always known most of our politicians are clowns, so maybe I shouldn’t be surprised.

I’ll Never Do it Again. No, Really. Honest.

October 27, 2008

So good old George Osborne admits he made a mistake in his dealings with the Russian billionaire. When he met him 5 times. And in no way, shape or form discussed how a donation could be channeled from him to the Tories. Osborne has stated that he will not be discussing individual donations with individual donors again. So at least the Tories have recognised the damage that this has done them, and that it has restored the issue of Tory corruption, added to other stories such as the money they have been receiving from a non-trading company that exists only for the purpose of providing them with cash. Cameron has supported Osborne, and said that the party has learnt lessons.

This is quite interesting. Cameron and his kitcken cabinet clearly realised that something needed to be seen to be done. But to have Osborne fall on his sword would seriously damage the credibility of Cameron’s Tories, and so they have come up with this halfway house. I really hope that the public is not as foolish as Vince Cable, the Liberal Democrats’ Treasury spokesperson, who said that Osborne’s “effectively apologising” drew a line under his involvement. This makes me wonder two things. Firstly, what have the Lib Dems been up to that they don’t want coming out to take such a lenient attitude. And secondly, how is it that the UK, which loves to boast how corruption free it is compared to the rest of Europe, has such a corrupt parliamentary elite.

I’ve suggested some answers in my previous post on the subject, and I cannot really see how this product of a nexus of personal links forged at school and university, and an identity of interest in financial terms, can be removed without a serious reconstruction of political culture. Can’t see it happening. A good first step would be the state funding of political parties.

As for Osborne. I suspect that unfortunately he will be able to recover from this with his reputation relatively well intact. Still, I am pleased that it came out when it did, and that Brown seems to be handling the current climate relatively well. Let’s just hope that Mandelson doesn’t derail things with more skeletons in his closet.

Ethics, Economics, and Eton

October 22, 2008

Just finished watching Newsnight, something I don’t do that often anymore as I think the quality has dipped of late. However this episode was fantastic. Three main things caught my interest. The first was of course the George Osbourne solicitation story. The second was the discussion of the Governor of the Bank of England’s statement that the UK is likely to be entering recession between Newsnight’s own shadow monetary committee of former Tory Chancellor Kenneth Clarke and two economists whose names I didn’t catch, and the last was the coverage of the US election.

However, for the sake of not having a totally ridiculously long post, and having missed the names of most of the shadow monetary committee, I’ll simply note Ken Clarke’s extremely effective – and I hate to say it, convincing – performance in a discussion that ranged across possible solutions and especially what role interest rates might have to play in attempting to attenuate the current crisis. I felt enlightened by the conversation. Similarly the report on the US election, which focused on what difference the change from Bush to either McCain or Obama might have on US relations with the world and for the rest of the world. I have deliberately being avoiding the US election, largely because I think that there will not actually be that much difference in US foreign policy no matter who wins. Certainly what it has become fashionable to call “the optics” of either of the two will be different from Bush and McCain’s would differ from Obama’s, but US strategic interests and policy will not change a great deal. I expect the US military presence in Iraq to be greatly reduced but not gone by the next election regardless of who wins. Obama may pull troops out at a slightly faster rate, but ultimately I think at most we are talking about timing. And as for Iran, the Middle East, (or Cuba, and the DPRK), let’s not forget Obama’s extremely belligerent statements about Iran, and complete lack of indication that he would be any more coercive of Israel to get the peace deal secured. I see again a change mainly in timing and rhetoric when it comes to foreign relations, not in policy and aims. Because of this conviction that one is not that different externally from the other, I’m not that interested, and don’t follow the thing as closely as many others (and besides, I preferred Hilary to either of them). For more detailed, and much more erudite commentary from a progressive viewpoint, see World By Storm’s many posts on the issues at Cedar Lounge Revolution.

So to Osbourne, Mandelson, and the richest man in Russia, Oleg Deripaska, another of those oligarchs who got rich on the backs of plundering the natural resources of the Russian people. Here we have an insight into the way politics works at the very highest level, and it is far from gratifying. The EU’s Trade Commissioner is staying at the (a?) holiday home of a leading financier, Nat Rothschild, a member of one of the world’s richest banking families, who introduces him to the billionaire trader in aluminium, the tariff on which Mandleson helps to set. Mandleson’s defence is quite simple – one cannot be involved in these types of negotiations with emerging economies like India, Brazil, South Africa and Russia without talking to important businessmen as well as politicians. The EU clears him, though as Nick Robinson of the BBC points out, should he do this now as a member of Cabinet, he would be in breach of the ministerial code. Given Mandleson’s track record, it is to say the least unsurprising that he would place himself in a questionable position. The Tories try to take advantage of the situation, with Osbourne briefing all and sundry about Mandleson badmouthing Brown.

Oops. Big mistake. Rothschild seemingly regards this as a breach of trust, and decides to punish Osbourne by publishing in an open letter to The Times the details of conversations involving Osbourne and the Tories’ chief fundraiser Andrew Feldman (who had been brought to the villa by Osbourne for this purpose) that were had about a potential illegal donation by Deripaska to the Conservatives, possibly using one of his UK-registered companies as a front. Rothschild says that Osbourne and Feldman asked Deripaska for money. The Tories deny this, and correctly state that no money was given, but have to admit that the Shadow Chancellor and their chief financier were party to conversations about possible donations, and that they met Deripaska on his yacht. In additional fuel to the fire, Deripaska lets it be known to the BBC that neither he nor anyone acting on his behalf initiated the discussions, while Rothschild has named a witness in support of his version of events. From The Times

Mr Rothschild issued his statement at 9pm in what appeared to be an escalation of hostilities between the hedge fund manager and his old friend from Oxford.
In it, he directly contradicted Mr Osborne’s suggestion that there had been no discussion of channelling donations through a British company. He went on to say that his witness, Mr Goodwin, a former adviser to President Clinton and a prospective non-executive director of Rusal, Mr Deripaska’s aluminium company, recalled that the subject of a donation arose briefly after they went to the Russian’s yacht “but the conversation gained no traction”. He added that at dinner later that evening the donation was again talked about “and Mr Osborne was interested in whether and how such a donation could be secured”.

I’ll come back to the presence of an advisor to a former US President, and the fact that Rothschild and Osbourne are old friends from Oxford. What we have here seems to be a clear case of, at the very least, The Tories at the highest level being prepared to involve themselves in discussions about illegal donations. And, quite frankly, I am not charitable enough to believe this most charitable version of events. The stench of corruption pervades this whole episode. It looks a hell of a lot like potentially the next Chancellor has been grovelling for illegal cash. How can we trust his, and his party’s, judgment, when it seems that he will be in hock to such powerful vested interests? How can we forget what this says about the likely corruption levels of any Cameron government?

And what does it tell us about the way politics still works in the UK at the highest level? First, the old boy network is alive and well, and incredibly strong in the Cameron Tory Party. Call me Dave was at Eton, as were a lot of the Shadow Cabinet. Osbourne compartively “slummed it” at St Paul’s. Rothschild and Osbourne are friends from Oxford, where they were both members of the Bullingdon Club, a perennially obnoxious drinking society for super-rich Oxford undergraduates who delight in vandalism and other petty criminality, as were Cameron and Boris Johnson. Feldman, the chief fundraiser, played on the same tennis team in Oxford as Cameron. Are we getting the picture yet? These elite networks that look after their own and protect each other’s interests even when laws are broken are the type of people who are running the UK – its politics, its government, its legal and financial institutions, and its media and cultural institutions, as was nicely quantified and analysed by The Observer earlier this year here and here. Given this culture, is it any surprise that politicians are open to undue influence from financiers and other vested interests.

But it goes much futher than that. The elite network is clearly not confined to the UK, but is an international phenomenon. Hence the significance of the EU Trade Commissioner and an ex-advisor to President Clinton on the richest man in Russia’s yacht. I am not – I want to stress – advocating a conspiratorial understanding of political and economic policy across the globe. Rather I am saying that if we want a vivid demonstration of how class, wealth and power remain inextricably interlinked – and act as posion to the democratic process and the decisions that affect and all too often sacrifice the interests of the ordinary citizens of numerous states – we need look no further than the holiday home of one hedge fund manager. Oh, and did I mention Rupert Murdoch dropped by too?

The Thatcher/Major government collapsed under the burden of its own inadequacies and corruption. Blair left office irrevocably tarnished by the corruption that surrounded him and other prominent New Labour politicians. It looks as though should Cameron, Osbourne, and the rest of their public school/Oxbridge nexus win the next election, we can expect more of the same, except more shamelessly and more quickly. All this though may have positive benefits. Brown’s handling of the financial crisis, and the credit he has been given in the US and the rest of Europe, has resulted in a Brown bounce. The Tories, without power to affect the crisis, are already beginning to look a lot less confident, and have lost some of their lead in the opinion polls. It looks as though this crisis will be more damaging, and I certainly hope so. “Two-Brains” Osbourne is suddenly looking a lot less clever, and the Tory Party’s claims to have reformed a lot less credible.

Nevertheless, the main lesson to be drawn from this is the need for democratisation and transparency. In the administration of government, in the financing of parties, in the taking of government policy, in our relations with other states, and in the control we must now assert over the financial institutions in whose interests the UK and much of the world have been run almost without challenge for the last thirty years by the elite nexus represented by Mandleson, Osbourne and their friends and international equivalents.

On the Marx Again

October 20, 2008

Good news from Germany, where sales of Marx have gone up 300% in recent months. One publisher has seen sales of Das Kapital rise eightfold. While this hardly means the Red Flag is about to be raised over the Reichstag once more (and more’s the pity), it does speak volumes about the extent of the crisis, and the fact that people are looking for answers. Certainly there is no more effective critic of capitalism, and no-one more ruthless at exposing the flaws of its boom and bust nature, or the effects of the relentless, restless search for profit that led to the extravagant financial speculation that has led us to where we are today.

So what use is Marx today? It is no good those of us on the left smugly saying see, we told you so, trotting (so to speak) out the usual quotes from Marx and leaving it at that. Marxism is a tool for analysing and changing society, not a set of sacred texts to genuflect before. The left likes to think it has a clear understanding of how we got where we are, but answers are proving harder to find. The parliamentary left everywhere is proving as useless as we might expect. So, as I wrote in one of my first entries, is the European Congress of Trade Unions. Isolated statements are popping up here and there, and Mark McGregor flagged up a very sensible statement from the President of the European United Left/Nordic Green Left in the European Parliament here that stressed the need to use governments’ powers to protect those on lower incomes and stimulate the real economy, including through the use of selective credit to encourage sustainable investment and job creation. This is the type of thinking we need from the radical left, creative and practical and focused always on concrete goals but with a longer term vision.

In Ireland, north and south, the left should be arguing for the state to focus its resources not on propping up the banks and their shareholders, but on beneficial investment – in houses especially, and in job creation. The Thatcherite mantras of the inefficiency of the state and EU competition rules have been cited by too many even on the left for too long against the state taking over or creating industries. These arguments look very hollow at the present time, when the power of the state could not be clearer, and the reality of the dependence on capitalism using the state to its benefit is equally clear. In southern Ireland, the consequence of an economy with an insufficient native industrial base is clear in a budget designed not for its own people but for foreign countries, while on Channel 4 news today a former chairman of a bank was pointing out that the UK lacked the export trade that enabled the Japanese to climb out of the collapse of their banking system in the 1990s. If we are seeing the return of Keynesianism as has been suggested, investment must go to the real economy, to real and productive jobs, not more call centres, and empty headquarters that transfer profits out of the country. It is time that not only the revolutionary, but the social democratic left found its voice, and spoke with confidence.

There is an assumption among many that the current crisis will lead inevitably to a swing to the left. This is not necessarily the case. On the contrary, we can see in the southern budget the swing to the right, while New Labour ministers have begun the rush to scapegoat immigrants. Left politicans, trade unions, political parties all have a responsibility here. We on the left must redouble our efforts to ensure that it is us and not the likes of the BNP that benefit.

Update: The Times has this piece discussing the renewed interest in Marx, which includes comments from Eric Hobsbawm, Martin Jacques, and various ex-Trotskyists and Alexi Sayle, an ex-Maoist.

Update 2: Eric Hobsbawm on BBC Radio 4’s Today programme here

Extra Marx: From The Guardian

My Heart Bleeds

October 20, 2008

Tragic

Paddy Murphy on The Celtic Tiger and Irish Economy and Society

October 19, 2008

Paddy Murphy is the pick of the Irish News columnists, and over the last few years has been hitting the nail on the head time and again with his expositions of the petty sectarian politics at Stormont and the incompetence of the regime there, and of the attitude of the British and Irish governments. He mixes a scepticism about the squalid sectarian carve up with a sense of social justice, and witty and acerbic writing. So it is with great interest that I read his take (subs may be required after about a week) on the death of the Celtic Tiger. The article discusses both the madnesses of economic behaviour in the south, and the effects of the boom on attitudes down there.

The article opens with an obituary

Tiger, Celtic (nee Cathleen Ní Houlihan) Suddenly, but not totally unexpectedly, at her residence off the coast of Europe. Mother of an estimated 33,000 millionaires, 75,000 cocaine-users and 170,000 people who paid more for their houses than they are worth. Deeply regretted by property developers, politicians and lawyers at public inquiries into alleged corruption. Her funeral service was conducted by Brian Lenihan in his budget speech on Tuesday.

Murphy asks where the Celtic Tiger came from, why it ended, and what its lasting impact is liable to be. “The answers are simple – its causes are unclear, its demise was inevitable and its impact is debatable.” On where the Tiger came from, he says “economic growth appears to have been a combination of chance and the ability to grasp that chance when it came” (When Roy Foster said the same thing in his Luck and The Irish, the reviewer for the Irish Times amongst others accused him of failing to accept that Irish people were capable of manufacturing their own prosperity. I wonder how people will think about that after recent events).

On the Tiger’s demise, Murphy comments

Its demise is easier to explain. It was caused by uncontrolled property speculation. About 88,000 new homes were built in the Republic last year, roughly half the number built in the UK for a population 12 times larger. Workers from across the world built houses at prices which few could afford and at a rate which only speculators could understand.
Fianna Fail believed the country could live on borrowed money. In reality it was living on borrowed time.

That is an amazing statistic on housebuilding, and a demonstration of two things. Firstly, that the speculation and unchecked housebuilding in the south has gone mad, and secondly that not enough housing is being built in the UK, despite there being apartments springing up everywhere you look. And yet the price of housing kept rising, and the demand remained there. This level of house building is both financially and environmentally unsustainable, and tighter regulation is needed on the use of land in future (I’m sure we all know people with horror stories about drainage, subsidence etc in poorly constructed homes built where they shouldn’t have been, never mind the transport issues etc). It also demonstrates the extent to which the boom of recent years sprang from an act of collective delusion – apparently no-one in the south (or much of the north for that matter) was looking at Britain in the early 1990s.

Murphy then turns his attention to the consequences of the Tiger.

So now that the tiger economy is dead, who gained the wealth, what was it used for and what type of society did it produce? Much of the new money went to an exclusive few. One per cent of the Irish population now owns a third of the wealth. They probably spent it on big houses and helicopters, which would explain the 1,200 helicopter flights in and out of the Punchestown race meeting last year.
More modest earners appear to have splashed out on alcohol, foreign holidays and wooden floors. The 7 per cent who remained in poverty had nothing additional to spend.

One percent of the southern population owns a third of the wealth. That is a frightening statistic, and an eloquent condemnation of the inequality generated by the boom. It might be a little more palatable at least had the government put the increased tax take to good use. Yet, as Murphy pointed out, it was used to cut taxation and build roads, including through Tara, which

symbolised the government’s problem with wealth. It forgot Ireland’s past and thus had no conceptual grasp of its future. Heritage and environment gave way to business. Yet in this week’s budget, Brian Lenihan ensured that the economy’s coffin was carried by the poor, the elderly and children. He called it a rallying cry to patriotic duty.
It included an end to free medical care for all those over 70, an increase in VAT and a �100 fee for emergency visits to hospital. That certainly sounds patriotic.

The figures Murphy provides certainly demonstrate what a sick joke the levies of 1% on income up to 100,000 Euro and 2% on everything over it on the population are. It is hard to imagine a more unfair tax. And the stark reality of the budget becomes clear. To be honest, I had somehow missed the 100 Euro fee for emergency visits to the hospital. Had I noticed it, my initial reaction to the budget would have been peppered with a lot more swear words. It’s hard to express the outrage I -and most people – feel at the idea of having to fork over money because you are having a heart attack.

As if this isn’t a telling enough indictment of society and government in the south,

What became known as rip-off Ireland pushed food prices to New York levels, while unemployment stayed at about 5 per cent. Meanwhile, Dublin airport became Ireland’s Ellis Island and many Irish people, so recently removed from the tyranny of landlordism, adapted remarkably quickly to being landlords themselves.
The new society is reflected in the levels of crime. The US did not have to teach us about guns and corruption. History shows that we taught them. But the new culture of individualism, the demise of organised religion and the introduction of illegal drugs all combined to create Chicago-style gangsterism in Dublin and Limerick. Dublin has the fastest growing murder rate of any European capital.
Meanwhile, as the Morris Tribunal showed, gardai persecuted the innocent rather than pursue the guilty.
While Ireland plc became a corporate brand name abroad, internally it neglected its cultural identity. Can anyone claim that the national sport of hurling or the Irish language benefited from 20 years of the Celtic tiger? Instead, Ireland became Europe’s favourite pub. The lasting impact, north and south, is that the tiger ate much of what was Celtic.

Has Ireland been culturally enriched by its new wealth? To return to Roy Foster’s Luck and the Irish, his chapter on culture certainly suggests so. The flourishing of Irish novelists, symbolised by numerous Booker prize wins, the popularity of Irish bands, and even Irish dancing (suitably jazzed up by Michael Flatley et al) suggests yes. The self-confidence of the place does the same. Yet Murphy is partly right too. Certainly he is correct on the criminal culture, and the explosion in drug use among the middle classes that fuels much of it. The cultural life of the ordinary person has probably been expanded by easier travel and wealth, but the Irish language certainly has not benefited, and the sense of community and solidarity has in many places been destroyed by individualism and shallow materialism reflected best in the Sunday Independent. Murphy’s critique then is a patriotic one, but it should not be mistaken for narrow nationalism of the type found in Desmond Fennell’s writings or that fuels anti-immigration hysteria elsewhere in Europe, and has the potential to raise its head in Ireland, and which may well have had a significant part to play in the very welcome rejection of the Lisbon Treaty.

The environmental and cultural questions Murphy raised should be at the centre of the debate of where we go from here. And yet, while it is easy to produce critiques of what is wrong, it is much harder to find solutions. Of course, we shouldn’t expect them in 750 words from a columnist, but we can and should expect them from the left, which must now mount a sustained attack on the greed, corruption, crass materialism, arrogance, recklessness, and short-term profiteering that has wasted such a glorious opportunity, and done so much damage to the fabric and culture of Irish society. We don’t have to agree with everything Murphy says to agree with his final sentence, a lament: “It all could have been managed so much better.”

Cuba an Oil Giant?

October 18, 2008

The Guardian is reporting that Cuba has discovered oil reserves potentially as large as those of the United States. If this is confirmed, then the situation in Cuba could be transformed, with the country becoming not only self-sufficient in oil, but an exporting country. However, the oil is difficult to extract, and the US blockcade prevents access to the most up-to-date equipment to extract it. Nevertheless, this is excellent news, and potentially the key to raising the living standards of the entire Cuban people, as well as adding extra strength to the bloc of Latin American progressive governments. It is possible that the oil might cause the US to soften its attitude to Cuba, or step up its efforts against socialism there, with the type of shenanigans familiar to us from Cuban history, and recent developments in Venezuela.

I heard the Cuban Ambassador to Ireland Noel Carillo talk about the devestating effects of the recent hurricanes on Cuba, and of the rebuilding efforts that are taking place there. Let’s hope that the oil reserves provide the resources to transform the country.