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Fixing the Crisis: Ideology Must Change

By Jim O'Sullivan

To address the existing crisis government must intervene decisively with a single intention; create an environment in which everyone can access the means to a decent living.



The first indication that the new government was not about to make changes necessary to refloat the ship of state was when some bright spark came forward with a “job creation” strategy that comprised getting Irish ex-pats, who live in the US, to phone companies in their locality who they think might be expanding and tell them that Ireland is open for business and a great place to make profits. The notion that a successful company would be waiting on a phone call to give them some pointers as to where they should set up is of course ludicrous---but at the roll out of this banal plan to “create” jobs, senior Ministers were in attendance oohing and aahing and clearly on the brink of being overwhelmed by the simplistic cuteness of it all.

Maybe this was just beginner’s nerves, a feeling that every crackpot idea that emerges must be embraced---time, a bit of experience and some mature reflection would see a little more discernment in what Ministers would attach themselves to---we hoped.

But encouraging this type of thing usually leads to even more quirkiness with little critical review---for fear that expressing reservations about such ideas might result in being accused of bad mouthing the efforts of others trying “to do something”.

Out of this malaise of dithering emerged another douzy---Hireland. This comprises a publicity campaign to encourage “entrepreneurs” to give someone a job. Complete with slick catchphrases, this plan seems to be about asking existing business’s to hire someone just for the sake of hiring them. This of course is at utter variance with what “good” business is all about. People are in business to make money---nothing else. The proposition that a company should hire someone where there is no actual job in existence is silly and dangerous. Did these guys never hear of Parkinson’s Law? Anyone who has run a business will tell you that containing costs is vital and where that is not done the entire enterprise is placed in jeopardy.

Parkinson’s Law states.  “Work expands to fill the time available for its completion” The only possible result of a scheme that proposes that workers be employed for any other reason than to meet an expanding workload is to render such companies less productive, less competitive and therefore vulnerable. But there are very few companies about the place so silly so we can conclude that jobs “pledged” are in the main actually vacancies that would need to be filled anyway and this gimmick is as good a way as any of getting undeserved kudos from a confused and befuddled people and their government.  (Aren’t Directors legally obliged to maximise returns for investors?)

Such shenanigans also gives credence to the erroneous view that charity is all that those who lose a job can expect. They also deflect the focus away from the real problem and therefore probably hamper real pressure and initiatives that are desperately needed---and given the scale of the problem these initiatives must come from government.

It is time to stop the sloganisng, such as “government can’t create jobs”. Whatever about the arguments for “small government” when things are going well, this stuff descends into nothing other than profoundly dangerous nonsense when we get into the state that we are now in. The “bright” ideas brought forth thus far are attempts to fix the “system” not the problem---that stems from the self-serving mad notion that the fiscal policy of “everyman for himself”, which led us into the mess, is somehow redeemable. In its redemption those with money and high incomes hope only to see their own positions protected.

So what should a government do as an alternative---the first thing is to honestly name the problem----a national emergency. That is the context in which measures to fix things must be couched. It would greatly help also of they came to some understanding of what exactly many of the population are enduring. To lose a job in any circumstances is a distressing event but to do so when there is very little opportunity to secure another is a catastrophe---and where a household looses the only source of income it is elevated to a calamity.

And the size of that calamity is gut-wrenching. Even when we deduct from the total of 450,000 “signing on” a number to allow for the usual flux in the employment market--- around 4% which is a figure that will be moving in and out of employment regardless of the state of the economy and is generally regarded as full employment---we still have the staggering figure of 320,000 in free fall and surviving on subsistence. And to help us all focus on the real problem, they should not be referred to as “jobless” but rather citizens denied the right to access a decent living.

And this is particularly the case when the ideology that informs policy is based on the idea that “distribution” should be left to itself. As a “job” is the only access to a living wage in this system the governments focus must be to provide such “jobs”. Extraordinarily the government is focusing on “enforcement” actions, such as “job activation”, in a “jobs” wilderness-----there simply are no jobs to get “activated” into. Aside from that little detail we know from experiences in Germany following re-unification, and in the UK under the current government, that these schemes are little more than sops to ideologues who want to believe, and want everyone else to as well, that the unemployed are “swinging the lead” and all that is needed is a little pressure and that will force them off the dole.

A policy approach that seeks to create/protect jobs and welfare supports rather than cut them is needed and such an approach has succeeded before. The US under Roosevelt is a good example in that he bucked the advice from the “Austrian School” of fiscal theorists and rather than cut he decided to proactively save jobs and protect supports. The New Deal transformed the economy which had been shattered by the “crash”. It looked at every aspect of life in the US and sought out any opportunities to provide work while at the same time maintaining a bottom line income safety net through which no citizen would fall.

Roosevelt raised the necessary funding to create thousands of jobs and provide social supports to those with no work by prudent borrowing and tapping into the accumulated wealth within the country.

He slashed high-end incomes in the public service, including for politicians, and increased income taxes under The Revenue Act of 1932. This saw multiple tax bands to protect low and middle incomes while ensuring that as income increased the tax burden rose in line with it.  The marginal income tax rate rose from 25% in 1931 to 79% by 1936 on all income over $200,000.  By doing this Roosevelt achieved two vital things; first, by demonstrating fairness, social solidarity was enhanced thereby reducing friction within the community and encouraging collective effort---and second, he moved money down the socio-economic ladder thereby significantly increasing spending at local level which in turn protected existing jobs and created new ones. And contrary to the scaremongering of those here who warn that should we do the same those with money will leave, wealthy US citizens responded to the call to patriotism and co-operated with Roosevelt to get the New Deal up and running.

And lest anyone think otherwise, there is a massive amount of money in the hands of Irish people that if brought to bear on this crisis would help construct a route out of the mire. All that is needed is the will of the government and the same patriotism on the part of our own million/billionaires as displayed by the US rich during the great depression.

Not only should government introduce the same tax system as Roosevelt but the wealthy themselves should step forward and offer long term loans at manageable interest rates.

The government must also look at other ways to give maximum access to work such as job sharing, extending parental leave, and encouraging people in work to undertake further training and education during which they can be replaced by those with no work.

There is a plethora of ways that the current crisis can be tackled but the essential ingredient is that all citizens agree at the outset that “we are all in this together”.

A state of emergency for a period of 4 years will provide the appropriate backdrop in which government can enact necessary emergency legislation to fulfill a programme in which the focus is on ensuring that we each play a part in accordance with our capacity and ability to do so and where each has access to the means to live with dignity.

But perhaps there is a question that needs to be addressed first: are we a community---or are we a wake of vultures content to feed off each other as the opportunity arises?