Who Benefits from Austerity?Mechanics Institute Limerick, Summer School, 4 May 2013

Dr. Conor McCabe, Equality Studies Centre, UCD School of Social Justice

11 May 2010

Dear Chief Secretary,

I'm afraid to tell you there's no money left.

Sincerely,

Liam Byrne.

chief secretary to the Treasury.

“The British Government has run out of money because all the money was spent in the good years.”

George Osborne, 25 February 2012

“So we cannot just carry on as we are. Unless we reform our economy - rebalance demand, restructure banking, and restore the sustainability of our public finances - we shall not only jeopardise recovery, but also fail the next generation.”

Mervyn King, TUC Conference, 15 September 2010.

5 March 2009. QE : £75 billion

10 October 2011. QE : £75 billion

2009 – 2011. corporate bond purchase via asset purchase facility : £375 billion

2012: Monetary Policy Committee approve a further £50 billion.

“So we cannot just carry on as we are. Unless we reform our economy - rebalance demand, restructure banking, and restore the sustainability of our public finances - we shall not only jeopardise recovery, but also fail the next generation.”

Mervyn King, TUC Conference, 15 September 2010.

Long Term Refinancing Operations (LTRO)

21 December 2011: €489.2 billion to 523 banks – 3yrs @ 1 per cent

29 February 2012: €529.5 billion to 800 banks – 3yrs @ 1 per cent

Long Term Refinancing Operations (LTRO)

21 December 2011: €489.2 billion to 523 banks – 3yrs @ 1 per cent

29 February 2012: €529.5 billion to 800 banks – 3yrs @ 1 per cent

“Some banks, particularly in Spain and Italy, used portions of those funds to buy higher-yielding bonds issued by their governments at a time when most investors remained skittish, and it helped reduce government borrowing costs.

But many banks primarily used the funds to pay down maturing debts or simply deposited the money at other banks or with the ECB itself, even though they yield less. The infusion fell short of some politicians' hope that it would stimulate bank lending to customers in struggling European economies.”

Wall Street Journal, 1 March 2012

Financialization refers to the increasing importance of financial markets, financial motives, financial institutions and financial elites in the operation of the economy and its governing institutions, both at the national and international levels.

Gerald Epstein, ‘Financialization, Rentier Interests, and Central Bank Policy’,2002

1970s – The Monetarist revolution

1980s – war on labour

1990s – Credit as a substitute for wage increases

2000s – Credit solution for wage stagnation fails

Present day – open conflict over monetary policy once again

Some characteristics of Neo-liberalism -

Attacks the post-war compromise between producer capital and labour – compromise that put severe checks on free movement of capital

- Great Britain and Northern Ireland = Social Democratic Welfare State

- Irish Republic = Corporatist State / Rerum Novarum (Vocationalism)

• Pushes a monetary policy designed to benefit financial rentiers

• Privileges asset-price speculation over producer-led employment

• Needs to kill inflation in order for asset price profit-seeking to work

“In the case of the United States, financialization during the 1990s led to a closer alignment of large industrial and financial firms in the U.S., leading to a greater emphasis by Alan Greenspan and the U.S. Federal Reserve in financial asset appreciation as a goal of monetary policy.”

Gerald Epstein (2001)

“In the case of the United States, financialization during the 1990s led to a closer alignment of large industrial and financial firms in the U.S., leading to a greater emphasis by Alan Greenspan and the U.S. Federal Reserve in financial asset appreciation as a goal of monetary policy.”

Gerald Epstein (2001)

“The goal of monetary expansion has been to do just enough to stabilize financial asset prices without going far enough to produce catch-up growth in the labor market”

Matthew Yglesias, Rentiers and Financialization (2011)

“What [the wealthy], businesses and banks share is a common interest in supporting asset prices, a lack of interest in seeking full employment unless it is a prerequisite for supporting asset prices, and an aversion to any policies that can trigger wage inflation.”

Ashwin Parameswares (2011)

Closing down of Dissent - Attacks on Equality in IrelandEquality Bodies – closed down or with reduced Budgets

Combat Poverty Agency –closed 2008 incorporated into the Department of Social Protection Equality Authority – 2009 43% cut and now being merged with the Human Rights Commission Women’s Health Council – closed 2009  Crisis Pregnancy Agency – closed and merged with the Health Service Executive  Irish Human Rights Commission -Budget cuts since 2009 and merged with Equality Authority Equality for Women Measure - co-funded by EU Operational Programme ---budget partly transferred out of

this area and now under Dept. For Enterprise, Trade and Employment  National Consultative Committee on Racism and Interculturalism (NCCRI) _Closed 2009  Gender Equality desk at the Department (Ministry) of Justice, Equality and Law Reform – Desk Closed 2009 Gender Equality Unit – Department of Education – Closed early 2000s Higher Education Equality Unit – UCC -Closed and merged into Higher Education Authority (early 2000s) National Women’s Council of Ireland -158 member organisations- budget cuts of 15% in 2008-11 and 38% in

2012 Traveller Education cutbacks 2011 and 2012 – all 42 Visiting teaches for Travellers removed*  Rape Crisis Network Ireland – core Health Authority Funding removed 2011

SAFE Ireland network of Women’s’ Refuges - core Health Authority Funding removed 2011

People With Disabilities in Ireland's (PWDI) - funding removed 2012

National Carers’ Strategy – abandoned 2009

Kathleen Lynch, Equality Studies UCD School of Social Justice 44