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Analysis/Comment Last Updated: Aug 23, 2010 - 8:24:15 PM

Irish Economy: Political disarray, panic, incompetence, a credibility gap and five-star "cradle to grave" socialism
By Michael Hennigan, Founder and Editor of Finfacts
Oct 21, 2008 - 7:28:49 AM

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Health Minister Mary Harney

As the Irish economy faces a number of years of economic uncertainty, the political disarray at government level in the aftermath of a Budget that reflected monumental incompetence, is a harbinger of much more chaos to come. The credibility gap between  the politicians in power and people widens as massaged financial forecasts only delay further days of reckoning ahead.

Minister for Finance Brian Lenihan said last Tuesday that he expects the economy to shrink by 1.5% next year, as measured by GNP, with GDP contracting by 0.75%. He said the Government is planning on a Budget deficit of 6.5% of GDP in 2009. On Friday, Goodbody Stockbrokers forecast that the economy will contract by as much as 4% in 2009 and that the Budget deficit was likely to breach 8% of GDP.

Who has a reason to be optimistic?

Having slammed anyone who dared question the house of cards that had been built on a construction boom, the political leadership expected its new mantra of responsibility to be swallowed hook, line and sinker, without a whimper. So the Budget date was brought forward to give the illusion of action but while taxes and benefit cuts were the easy options to target, there was nothing that even resembled reform of the huge public spending machine. They even had the neck to provide for additional spending in 2009, of more than 12% in the Oireachtas budget.

At the centre of the controversy about medical entitlement for over 70's is Health Minister Mary Harney and she more than any senior politician illustrates the gap between the governing class and the governed.

Despite her promotion of markets and free enterprise in the past, Harney has been on the public payroll all her adult life. If she retires at the next general election, which has to be held by mid-2012, she will have an annual pension of about €130,000, at 59, indexed to future ministerial pay rises. In addition, she would get a lump sum severance payment of about €70,000. Having been a family beneficiary of land allocation in West Dublin, by a State agency known as the Land Commission, her situation could be termed an illustration of five-star "cradle to grave" socialism.

So Harney taking a pay cut of 10% with her ministerial colleagues, while the system of feather-bedding continues, with ministers having a 120-strong group of constituency 'helpers" on the public payroll and so much more, cuts no ice - - 35 ministers in a country of 4.2 million??

99 paid officer positions in a parliament of 216 - - Tammany Hall here we come!!

More than 1 million Irish private sector workers have no occupational pension.

As in the self-styled socialist paradises of the past, five-star "cradle to grave" socialism today in Ireland, is only for the Insiders.

As for the current political turmoil, the so-called "independent" TD Finian McGrath, who had sold his vote to Fianna Fáil for five years of job security, is now taking a "principled" stand on medical cards- - because he fears getting the boot at the next election.

"What influenced me was listening to people and talking to constituents for five hours on Saturday morning. This was also the way my election workers wanted to go. I did change ground," McGrath told the Irish Times. He is also reported to have read out a list of the projects that had been completed in his constituency as a result of his deal with Fianna Fáil.

Shouldn't every constituency have such a Messiah! Whoever thought gombeenism had been buried during the days of the Celtic Tiger!

The Sunday Business Post's Political Editor Pat Leahy reported in 2006 that McGrath had returned from Cuba, denying that it was a repressive dictatorship.

‘‘No, I’d dispute that,” he said and added,"it’s a different kind of democracy to Ireland.”

Whatever about the Cuban brand, where there is no opposition, the Irish version is propped up by the primacy of self-interest over principle and like McGrath, teachers dominate parliamentary representation.

The Green Party's John Gormley in 2007 - - "On Planet Bertie you can sign blank cheques – because everyone does it, apparently. On Planet Bertie you can spend the average industrial wage on make-up. On Planet Bertie you can get loans from people – that you don't have to pay back. On Planet Bertie you can save €50,000 – without a bank account. And on Planet Bertie, climate change doesn't exist.

On Planet Bertie there's a strange cult called Fianna Fáil, a type of religion without vision or values; and every year in August they go on their annual pilgrimage to one of their sacred sites, the tent at the Galway races, where they pay homage to their gods and the gods bestow them with gifts for doing their bidding. Oh yes, it's a strange place Planet Bertie. So strange and so alien to our sensibilities, that it's a planet that we Greens would like to avoid. For let there be no doubt, we want Fianna Fáil and the PDs out of Government.

Fianna Fáil is happy to have support from the "independents" and niche parties such as the PDs in the past, who were impotent in terms of impact on policy, but were loud cheerleaders for tax cuts and now the Green Party, who are thrown a few baubles such as spending on cycle paths but it also has no impact on policymaking.

The two Green ministers had approved the Budget but like Finian McGrath are now trying to sail with the wind.

McGrath was neither in office or power, while Green Party leader John Gormley is in office without power.

Gormley will be faced with a choice in 2009 as the option of being for and against harsh measures will not wash. The choice will be to stick with the Faustian bargain with the Fianna Fáil of Planet Bertie (a "strange cult called Fianna Fáil, a type of religion without vision or values" - - Gormley in Feb 2007), or cut and run, while hoping for some salvation from a sullen electorate. The Devil is however, likely to be the one having the last laugh!

Finfacts Budget 2009 Page

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