Fear for My Friends

The R word has arrived in our office.

With staggering speed the amount of work we had on hand has plummeted as clients cancelled contracts or asked us could we delay them, and now we’re undergoing cost-cutting.

Some of the staff are going to be made redundant next week. At the moment the bosses are deciding who and how many, and Tuesday next is Judgement Day.

I won’t be one of them, not because I’m brilliant or irreplaceable, but because some of the work I do in the office can’t be done by anyone else on the current staff. This is obviously a relief, but also a source of guilt. I look at the rest of the staff, see the panic in their eyes (one poor girl’s husband lost his job on Christmas Eve), and can’t share their fears.

At least not for myself. Some of the wonderful people I’ve worked with for the last three years are going to lose their jobs. Some of them may be people who’ve appeared in stories here, the warm, fun-loving, generous young people who’ve welcomed the older guy with the health problems into their midst, and who’ve become my really good friends. These people are hard-working and professional in everything they do, and a number of them will be out of work in six days time. I don’t blame our boss for this, though I look at the greyness in his face these days and see that he does. I don’t blame our clients, desperately trying to cut their costs by stopping any expenditure they consider non-crucial. We are now doing the same, which may have an impact on the staff of some company that sells to us. Everyone is doing what they can to keep going in a country where all expenditure has virtually stopped.

The evening news has just ended as I write this. Last September Irish Life & Permanent put €4 billion on deposit in Anglo Irish on the last day of its financial year, just to make it look healthier, & took it back 10 days later. The truly awful Financial Regulator at the time, who was finally forced to resign when people could take his cosy incompetence no longer, is getting a payoff of €630,000 and an annual pension of €142,670, while my friends will be getting €202 per week at the dole office.

Tonight Minister for Finance Brian Lenihan is putting €7 billion of our money into two other banks, AIB and Bank of Ireland. We all know that eventually we’ll have to take over their “toxic debt” as well, to keep them and their staff afloat. These banks lent money to anyone when things were going well and now won’t lend to anyone when they aren’t, thus causing most of our problems and then making them worse. This Minister today admitted that the Irish Life & Permanent deposit was mentioned in a report he was given last October, but he “didn’t read it all”. He is, of course, still Minister for Finance, though he’s doing his job far more badly than any of my workmates have done theirs.

And our big blustering Taoiseach? He’s so useless that the fact that he made an interesting speech last week was regarded as headline news.

These fools have cost my friends their jobs.

Talking Down to Us

The political commentators are not very pleased with us. They think we’re greedy, self-serving and unwilling to make sacrifices for the benefit of others.

They also think we haven’t a clue.

Political writer Stephen Collins says that “the ruled haven’t got the message and are showing no signs of being in any mood to face reality”.

Noel Whelan, political writer & former Fianna Fail election candidate, says “this country is painfully and slowly going to have to realise that it has real choices to make”.

Saturday’s Irish Times editorial told us that “the Government was trying to recognise the implications of this new reality. Those who oppose its measures will have to do the same”.

The Tribune’s Political Editor Shane Coleman tells us that at least TDs know how bad things are, and that “it’s questionable whether the same holds for the general public in relation to the state of the economy”.

And the Indo quotes Foreign Affairs Minister Mícheál Martin saying “we are in a very volatile period – perhaps the gravity of which hasn’t sunk in in society”.

But we know all this, and are perfectly willing to make sacrifices because of it. We have accepted the Income Levy, asking only that the very low-paid be exempted from it. We’ve accepted the VAT increase, coming in just 4 weeks before Christmas. We’re putting up with the increase in the drug repayment threshold, and putting up with the reduction in the tax repayable on our medical bills. We’re suffering cuts in child benefit, increases in petrol and motor taxes, and the imposition of largely pointless charges like the airport levy. We’re paying more PRSI.

In other words, we’re all going to pay higher taxes for lower services, and by nad large are putting up with it.

So just because we objected to the very worst parts of the Budget, and its effects on the elderly, the low-paid and the children, don’t tell us we don’t know how bad things are, or that we’re unwilling to face reality.

The customers in my local are ordinary hard-working people. They include painters, carpenters, mechanics, etc. The painters have no work. One of the mechanics is still employed, but two-thirds of the people that worked with him are gone. A labourer was let go at the summer holidays, and hasn’t worked since. A bricklayer now works in Tesco.

These people know all about the reality in this country. And they’ve known about it for quite a while.

One Tough Cookie

The Irish Times on October 4th reported this on its front page:

THE GOVERNMENT and Central Bank will seek up to €2 billion in charges from the Irish banks and building societies covered under the State’s bank guarantee.

However, the banks will be pressing to cap the charges at about €1 billion, or €500 million over each of the two years of State protection cover.

And on October 16th, unnoticed in the middle of the Budget rows, it reported this:

THE 11 BANKS covered by the State guarantee scheme will pay €1 billion over two years to be covered by the deal, it emerged yesterday evening when details of the scheme were published.

Well done, Brian Lenihan. Excellent negotiating skills there.

Here’s a man who really knows how to drive a hard bargain. Good to know that he stuck the banks for every cent that he possibly could.

Like he did with you and me.

When the Levy Breaks

A spokesman for the Department of Finance says that the new €200 parking levy will apply to “civil Servants and members of the Oireachtas, as well as ordinary citizens”.

Leaving aside the unspoken implication that civil servants and members of the Oireachtas are Extraordinary Citizens, here is a short tale to illustrate how well that’s likely to go.

One day last week I had to walk along Bow Lane, near St Stephens Green. There is a small waste management facility there run by Waste Management Services, the waste disposal section of Dublin City Council. Across the narrow lane there are 7 or 8 “Pay and Display” parking spaces. As I walked by I noticed that all but one of the cars parked there had a flourescent Waste Management Services yellow jacket fitted over the steering wheel, like a tea-cosy. None of the jacketed cars had a ticket displayed.

As I wasn’t able to do what I’d set out to do that day, last Monday I’d to go there again. Again all but one of the spaces was occupied by cars sporting bright yellow jackets on their steering wheel, in case case fitted so that the words “Waste Management Services” were clearly visible. Again none of the cars had a parking ticket.

Clearly then the jackets act as a Membership Card, telling the Council clampers that these cars are not to be touched.

We’ve been told that we commuters shouldn’t drive into the city centre, both to cut traffic jams and to leave spaces free for shoppers, but council workers are permitted to drive their private cars into the very heart of the city, and to take up a whole street full of spaces all day just yards from the Grafton Street shopping area. And they pay nothing for this.

So good luck with applying the parking levy to civil servants, Brian.

Danceband on the Titanic

The aim of yesterday’s budget was apparently to restore stability and confidence in our economy.

I’ve just overheard three of the girls in our office discussing which countries they would consider emigrating to.

So that went well.

Brothers in Arms

Announcing today that the new 1% levy (i.e., tax) would be payable by all citizens, including those not earning enough to actually qualify to pay Income Tax, Brian Lenihan said:

“We realise the solidarity it demands of all taxpayers. But there is too much at stake: we all have too much to lose by not taking action now. This levy will allow all income earners to contribute in a proportionate manner to the restoration of order and stability to the public finances.”

His approach is to try and persuade us that “we’re all in this together, eh chaps?”. It tries to evoke a wartime spirit, in that, while we can’t actually fight the recession on the beaches, we’ll do the next best thing and fight it in the wallets.

It’s nice of him to ‘allow’ all income earners to contribute. The more cynical among us may say that by raising the rate of VAT 4 weeks before Christmas he is ‘allowing’ us all to contribute in any case, but such cynicism would surely be denounced as unpatriotic by the Churchillian Brian.

So here we all are: workers on the minimum hourly wage, part-time workers, schoolkids working in shops at weekends, students working a couple of nights in pubs, trainees on FAS schemes, all chipping in merrily to help get our good old country back on its feet.

And those availing of special tax reliefs and exemptions? Er, well, they’ll be paying the levy too.

In many cases it’ll double the amount they are paying.

One Less Thing to Worry About

NIB announced this morning that they are withdrawing their ECB Tracker Mortgages.

So those of us who don’t know what a tracker mortgage is don’t have to ever bother finding out.

Excellent.

Bail-Out Banking for Dummies

A Guide for the Rest of Us!!

Once upon a time someone (let’s call him a Depositor) lent Tinman 100 euro.

Tinman didn’t keep this money for himself. He decided to lend it on to another person (a Developer) who wanted to invest it in a Crackpot Scheme (literally – he wanted to invest in selling cracked pots, some sort of Olde Worlde Decor craze, apparently). The idea seemed strange, but the boom was on, people would buy anything (rumour had it they’d buy bottled water while it was bucketing down outside), and the Developer promised he’d pay it back, so Tinman could pay the Depositor, and everyone would be happy.

But one day the boom stopped. People stopped paying good money for bad crap, and the bottom fell out of the crackpot market (and, in many cases, out of the pots themselves). Word began to circulate that the Developer might struggle to repay Tinman, though Tinman assured everyone that all was OK.

But one Monday evening the Depositor called to the door. He wanted his money back now. Tinman rang the Developer, only to be told that he was as broke as his pots (his exact words were “I haven’t a pot to piss in”). Tinman relayed on this info, and the Depositor suggested he say goodbye to his kneecaps.

Uncle Brian

Suddenly Tinman remembered his rich Uncle Brian. He had largely ignored Uncle Brian and the rest of his relations over the years, tending to laugh at them if they asked him to do anything, but this was a crisis, and, as I’ve heard it said somewhere quite recently, blood is thicker than water. Also, that side of the family are known to value a dig-out when it’s needed. Off he went to Uncle Brian’s to argue his case in a calm, professional manner. Tinman knocked at the door, and Uncle Brian opened it.

“Ohsweetjesusyouhavetohelpmeorimfuckedaltogetherpleasepleasepleaseprettypleaseforgodssakegiveusafewbob”, he argued calmly and professionally.

“I won’t give you money,” said Uncle Brian, and Tinman’s heart (which he’d got from Oz) sank. “I’ll do better than that. I’ll guarantee that if the Developer doesn’t pay you, I’ll pay the Depositor myself.”

Tinman’s heart rose again, as did the Depositor’s. “Sure, if I know you have the money, I don’t need it right now. In fact, here’s another 100 euro. Don’t spend it all in the one shop.”

And Tinman didn’t. He lent it to the Developer. “Pay it back when you can,” he said, “and don’t worry, if you can’t pay it back, I’ll write it off as a Bad Debt. Sure I’ve no incentive to collect it at all now.”

And so they all lived happily ever after. Not only did the depositor give even more money to Tinman, but he got all his friends to do it too, as they all knew that they had found the safest place of all for it. And Tinman found lots of the developers’ friends to lend it to, as they all knew that they had found the man with the least reason for putting pressure on them to repay it.

Soon every Depositor in the whole world had lent their money to Tinman, knowing that Uncle Brian would repay them if Tinman couldn’t. By this stage Tinman was lending money to drunks at Luas stops to buy cans of Dutch Gold. Not too much of the money was being repaid, but he had a varied loan portfolio, so he was Ok.

Now buy my book!

And was Uncle Brian worried? Not at all. Because, if anything went wrong (though he couldn’t see how it could) he wasn’t actually going to repay the money himself.

He knew four million other people who were going to do it for him.

Buddy, can you spare a dime

The world’s Central Banks are acting to rescue commercial banks from the financial disaster brought about by their own greed and stupidity (‘we’ve lent to absolutely everyone we know can pay us back. How can we make more money? I know, let’s start lending to people who can’t').

Hopefully this will soften the attitude ‘going forward’ (obnoxious banking term) of those who believe totally in the free market, and who believe that those in receipt of any type of welfare are lazy worthless scum who should be either (a) forced to take any job offered to them or (b) sent home.

The six Central Banks have a fund of $180 billion which will they make available to commercial banks in order “to boost their short term requirements”.

In layman’s terms, the banks have temporarily gotten themselves into financial difficulty, and the governments are giving them money until they get back on their feet.

In other words, the banks are on the dole.

What were we thinking?

On Saturday morning on Newstalk, our Minister for Finance Brian Lenihan, had this to say:

“You know, we’ve got to be honest about this as a people. We decided, as a people collectively, to have this housing boom. We decided not to have property taxes, to demand reductions in stamp duties, to demand interest for those who bought to-let properties, and there was no questioning in any part of the political system about that.”

There you go. Yet again, it was all our fault.

It’s a bit scary that the person now entrusted with getting us out of this mess (that we ourselves, apparently, have caused) believes that opposition to property taxes and a demand for reductions in stamp duty equates to support for a housing boom. Property taxes are inequitable, because they take no account of income, and stamp duty is possibly the most illogical and anomolous tax that anyone has ever come up with. Things which are wrong should always be opposed.

Anyway, he reckons we “decided, as a people collectively, to have this housing boom”. I didn’t. I doubt that people who have been forced to buy houses in Arklow and Dundalk, and face four hours a day of commuting, supported it. I doubt that people spending over half their take home pay on rent in Dublin city centre did. I doubt that people who discovered that green areas around them were being re-zoned for housing did. Or those who found that permission had been granted for infill housing in the back gardens of some neighbouring estate, and whose gardens would now be overlooked. Or those young people who are now the first Irish generation ever to believe that they will never own a house.

I think when he said we, as a people collectively, he meant people at his economic level – he is a former Senior Counsel and now very well-paid minister. The people of his social circle – solicitors, auctioneers, landowners, builders, property developers, bank managers – all collectively decided on the housing boom, since it enriched them all.

The real people, is what I think he meant.