Ireland’s endless agony

If you go back and read the 2010 Irish budget as laid out in 09 and then the additional budgets since, you can see all the slashing and burning of public spending. All essential, the Irish people were told, in order to cut the budget deficit.  Around €5 billion in cuts.  All of which, every euro of it, has NOT been saved, has NOT been cut from the debt, but instead, was yesterday given to Ireland’s banks.

Think of it this way.  Let’s imagine the banks as somethig more ordinary – as land owners. Instead of loans, fields under cultivation. A huge mono crop of potatoes. Every loan a plant.  If a landowner had such a crop and it failed, blighted from leave to root, it would be a disaster.  What would have to happen?  Every field ploughed up, every plant burnt.

But not this time.  Oh, no. The banks aren’t some bunch of rough necked farmers. They have friends in government. SO what has happened to their blighted crop?  Well it has been harvested methodically as if nothing was wrong. One field after another of stinking, black slimy infection has been sacked up, and sold to YOU!  The government has paid the farmer for every last spade full.

Of course, they will say, some of it we have only paid 65 cents on the euro for it.  Why buy it at all? THAT is the question to which there is no answer beyond the intoned “we can’t frighten the bond market or else Ireland will be ruined”.  What you mean like Argentina was ‘ruined’ or Iceland is ‘ruined’?  That  kind of ruined?  Are those countries more ruined than Ireland is now and will be as the next year grinds on? Or have they somehow escaped this utter ‘ruination’ and found that actually, life and prosperity return? Or do the Irish politicians mean there is something darker they have not so far dared to mention? Some as yet completely unadmitted pile of debts?  Surely not.

If truth be told saving insolvent bankers is what all the austerity has been for.  It has NOT been about reducing public debt.  That cannot be the case because the debt has gone UP as a consequence of giving more and more money to the banks.

What would have happened, do you  think, if the Irish government and its Central Bank, had said to the Irish people, you must take wage cuts and pension erosion, have less spent on your children’s education and health – and you must do all this in order than we can give all the money to some insolvent banks?

Do you think people would have thought it was a good idea?  Would they have agreed? Or do you think people might have had a few questions they wanted answered first? And yet the politicians and bankers knew this was exactly what all the austerity was really for.  So they simply lied to their own people. Because there are questions about Ireland’s debts they will not, dare not, answer.

They told them the austerity was so that Ireland’s debts could be reduced and so that her borrowing costs could be contained. But that was a lie.  Because the money saved was not used to reduce Ireland’s debt. That debt has grown by tens of billions THIS YEAR. AND Ireland’s borrowing costs are now at or just below record levels.

Every ounce of suffering has been simply to bail out insolvent banks.  That is the bald fact.

Everything saved this last year was handed to Anglo Irish and Allied Irish yesterday and today. Simple as that.

And here is what really makes me angry.  Every time the banks have been bailed and re-bailed, the fatuous mottled politicians and greasey weasel banking experts, have said, “Oh that’s it now. Line in the sand. No more.” But it has always been more. hasn’t it?

And you know what  this isn’t the end either. And we can refer Mr Honohan of the central bank for conformation.  Because he knows even the current losses are based on ‘worst case scenarios‘ which are of losses on bank ‘assets’ of 70%.  Who says the losses will stop there? Would it be the same fools who assured us all the losses would remain below 60%?

And we can refer to Mr Lenihan, Minister for Finance, who said today that the deficit is more serious and dangerous than the bank crisis and therefore YET MORE cuts would be imposed.  A splendid piece of financial misdirection.  The deficit IS the banking crisis. Without the wasted billions spent on the rotting harvest of bank debts the Irish debt load would be a third of the size.

But the worst of Mr Lenihan’s sophistry is this.  The impression is always carefully given that once the latest round of bail out blackmail money is handed over, the banks are ‘saved’ from their losses and will ‘recover’.  NO THEY WON’T. And Mr Lenihan knows this.

How do banks make money normally?  They take deposits, lend and trade on the markets.  The Irish people are being bled of any money they make. SO there won’t be any profits from deposits. The banks have nothing and no one to led to, not in Ireland, for certain. Austerity has salted the earth and poisoned the wells.  And  as the global markets slow down in 2011 and beyond, as they are now doing, Ireland’s banks will make losses and fail. One trading house after another is filing returns showing catastrophic falls in income from trading. So no chance of salvation from there either.

Ireland is saving their banks from yesterday’s losses so they can wither and die all over again from today’s.  The Irish banks are bankrupt, enfeebled and facing hard financial times. Ireland is being bled dry to ”save’ banks just so that they can now make ‘ordinary’ losses and need to be saved from them in turn. Will the Irish government save them from those as well?