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Speaking of Goldman Sachs… September 29, 2011

Posted by WorldbyStorm in Economy, Irish Politics.
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As we were here… Richard Curran has a sensible piece in the Sunday Business Post which cuts through some of the rhetoric extant at the moment, and perhaps is of a piece with this on Irish Economy recently where… was sceptical about the rhetoric surrounding public sector pay cuts while arguing for targeted cuts in certain areas.

He expresses healthy scepticism of a talk by Goldman Sachs International Chairman, one P. Sutherland who while arguing that ‘things were getting better… in terms of international perceptions of Ireland and its ability to work through the crisis’ also argued for front loading of ‘pain’ in the budget beyond €3.6bn and appeared, according to Curran, to be calling for public sector pay in Ireland to be cut [cut further, though Curran doesn't say that].

But Curran makes a useful point when he notes that:

Pay has already cut across large swathes of the economy. Cutting it further could well be a dangerous game. If public sector pay here were cut to the European average it would do a lot for our exchequer balance. however, Irish public sector employees carry higher personal debt levels than the European average as do Irish citizens across the board.

And he continues:

If you cut pay in too extreme a fashion, without a mechanism to cut people’s debt, it’s no longer about them tightening their belts; they will simply be personally insolvent.

European pay rate comparisons might be a useful guide in some ways but if we set them as the target without taking Irish people’s own debt situations into account, real financial carnage will ensue on a personal level.

This is a useful counter to a rhetoric of pain which often appears to assume that economic austerity is good in and of itself without considering the broader systemic ramifications. Michael Taft for years now has been arguing that quite apart from the deflationary impacts on the broader economy of such proposed cuts their actual cost-savings benefit is so minimal as to make little difference to our financial situation.

As it happens the politics many/most on the left advocate will de facto cut wages through increased taxation – how else do we pay for our socio-economic programmes. And the public sector isn’t going to be sheltered from that. But, there’s a time and a place and in the teeth of a recession policies that push us further into deflation appear deeply misconceived.

Worth noting too the tide politically while not changing may see some interesting counterexamples put forward, as with the election this last week of Danish Social Democrat Helle Thorning-Schmidt who has campaigned on a platform resolutely opposed to austerity. Not for her spending cuts, indeed her government is introducing a wealth tax as well. And one small measure that makes sense as well is that she calls on all workers to work a quarter hour a day more without pay in order to raise taxes and increase productivity.

Social solidarity in every sense of the term.

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Comments»

1. LeftAtTheCross - September 29, 2011

“And one small measure that makes sense as well is that she calls on all workers to work a quarter hour a day more without pay in order to raise taxes and increase productivity.”

WBS, is it not true to say that worker productivity is not the problem in the developed capitalist economies, but rather underemployment and unemployment due to productivity which is already excessive for the needs of society?

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WorldbyStorm - September 29, 2011

First up that’s a fair point LATC, what I’d suggest though is that in this instance that government appears to be protecting social provision etc and arguing for a – fairly tokenistic, granted – example of social solidarity. I think it’s the presentational or symbolic significance of it which is important. Besides which they’re social democrats. What more do you expect ;)

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2. CMK - September 29, 2011

I read that Curran piece too and I thought that it’s a bit late now that at least some stalwarts of the austerity discourse are beginning to have second thoughts. It’s depressing to see considerations ventilated by Michael Taft over three years ago, finally percolating into the mainstream after all the damage has been done to incomes, services etc. Whatever about Curran’s insights in Sunday’s SBP, it was heartening to see the SBP at the barricades in defence of the 100 million state subvention to private schools. Only one side fighting this class war.

While we’re on the subject of Goldman Sachs, RTE’s deferrence towards Sutherland is, for me, the clincher that it is an irredeemibly neo-liberal outfit. The latest interview with ‘Morning Ireland’ was a disgrace.

The first question put to Sutherland on any interview he conducts with RTE should concern his knowledge of Goldman Sachs’ involvement in cooking the books for the Greek government. And if he wasn’t personnally involved he should be questioned, hard and persistently, about the role the bank he Chairs in that affair. If, prior to any interview, he signals that he will refuse these questions, then he shouldn’t be interviewed at all. That this individual, whose organisation is making billions from speculation and its attendant misery, is treated as a some kind of sage by RTE, while not surprising, confirms conclusively that RTE obviously has an explicit editorial line to endorse austerity and go easy on the advocates of austerity. And we’re paying EUR 160 per licence to an organisation dedicated to destroying the living standards of Irish workers.

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Chet Carter - September 29, 2011

+1, he should be called out for the pompous buffoon that he is. Remember, he was also an executive director at RBS during the reign of Fred the Shred.

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CMK - September 29, 2011

I’ve Cathal MacCoille fillet interviewees on subjects of far less importance. Any trade unionist will be roasted by MacCoille ‘think of the old, sick and handicapped inconvenienced by this strike’ etc, etc.

Goldman Sachs are at the root of the Greek crisis which has all the markings of an apocalyse that, so far, has wrecked the lives of millions of Greeks and threatens to wrecks the lives of tens of millions more across Europe. Goldman Sachs are inextricably linked to this crisis, but, if you listened to RTE and (foolishly) took what they broadcast as accurate, you’d never know a dickiebird about Sutherland’s role in the Greek crisis.

Actually the more I think about him I keep recalling that old chant: ‘One more cut:______’s throat’. I think Sutherland’s name would nicely fill the blank.

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Michael Carley - September 29, 2011

And a non-exec at AIB.

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Ghandi - September 29, 2011

+1

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WorldbyStorm - September 29, 2011

+1 too

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3. Ghandi - September 29, 2011

“The first question put to Sutherland on any interview he conducts with RTE should concern his knowledge of Goldman Sachs’ involvement in cooking the books for the Greek government”

Along with his involvemnent in AIB, WTO, EU, FG, BP and as AG,
though the State broadcaster seems to always only refer to him as a former EU Commissioner, obviously time constraints don’t allow them to give the full list.

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WorldbyStorm - September 29, 2011

And that’s a great point. It’s not like he doesn’t have an agenda. He surely does.

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EWI - September 29, 2011

Sutherland’s standard condition for doing Irish interviews seems to be that Goldman Sachs never be mentioned.

RTÉ have prefaced one or two pieces with this admission in the recent past.

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CMK - October 2, 2011

As I long suspected, Sutherland is still claiming his pension (50k per year despite a personal fortune of 80 million) for a few years work as Attorney General in the 80’s. Will RTE tackle him about that?

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CMK - October 2, 2011
4. make do and mend - September 29, 2011

On a more direct note. Today I went to pay my annual auto tax (in my case a van.) I was handed a sheet of paper by the tax clerk and told it had to be filled out by the gaurds, and I was also told to present insurance or tax documents to prove the van was used solely for business. I got the van for business purposes but had to change my tax status with the revenue last year.

Long story short, I had to pay over €300 extra in tax. As I paid the tax, I was taken by the fact that this money was leaving my pocket and going straight into the pocket of a rich bond holder. Today the “austerity” measures hit home like a rocket. I actually visualised the transaction between me and the rich and powerful – the tax office only acting as a half arsed intermediary.

I related the story to my spouse at lunch, and the response was swift and direct: lets get the fuck out of dodge.

So that’s it. Tonight we decide, but its seems like a done deal.

You don’t have much longer to put up with my boring rants! (That’s if anyone actually bothers to read the fecking things. The rants seem important to me at the time, so I thank WBS and other for providing the space. Thanks.)

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LeftAtTheCross - September 29, 2011

Unless you’re moving from Dodge to Havana or Pyongyang I’m afraid you’ll be in the same boat wherever you are, you might just be able to ignore it for a while longer if you’re not as embedded into the politcs of your new home or if the impact on your life isn’t as obvious. But the same forces will still be at play. Red pill or blue pill, make your choice.

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ejh - September 29, 2011

Where are you getting the fuck out of Dodge to? Somewhere that hasn’t got the internet?

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WorldbyStorm - September 29, 2011

Hey, don’t stop commenting just because you go somewhere else. It’s a pleasure and education to have your thoughts on here.

Though I do understand the feeling. I had a similar enough conversation about 12 months ago but the decision was that at the moment it made no sense.

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CMK - September 29, 2011

250 million being paid out to bondholders today (29 September) alone. As Peter Sutherland might say: ‘luvly-jubbly’.

http://bondwatchireland.blogspot.com/

MADM, best of luck with wherever you end up. Can’t say I blame you for going, but this country needs far more people like you far more than it’ll ever need Sutherland, McDowell, Harris, Ahern, Cowen, etc, etc,.

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LeftAtTheCross - September 29, 2011

+1

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Ghandi - September 29, 2011

“So that’s it. Tonight we decide, but its seems like a done deal”.

Seems her indoors has already decided.

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LeftAtTheCross - September 29, 2011

Or him indoors?

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5. Ghandi - September 29, 2011

LATC – he did say spouse
“I related the story to my spouse at lunch”

Collins: English Dictionary Definition (Meaning) of spouse

n

a person’s partner in marriage,
Latin sponsus, sponsa betrothed man or woman

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6. Ghandi - September 29, 2011

Of course I do concede that Make Do & Mend may be a woman, in that case LATC you would be correct

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LeftAtTheCross - September 29, 2011

Ghandi, I don’t think MDAM has disclosed their gender on CLR? You had assumed that MDAM was male. Maybe so, maybe not. The politically correct thing to do was to point out the chauvinistic assumption, that’s all.

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7. CL - September 30, 2011

“The first thing you need to know about Goldman Sachs is that it’s everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. In fact, the history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled dry American empire, reads like a Who’s Who of Goldman Sachs graduates.”

http://www.rollingstone.com/politics/news/the-great-american-bubble-machine-20100405

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8. Panic Grips The Sycophants Of The Golden Circle « An Sionnach Fionn - September 30, 2011

[...] struggling to survive, and dictated to by those who have reduced our nation to its sorry condition through their sheer bloody greed and [...]

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9. The Fiscal Council has spoken… « The Cedar Lounge Revolution - October 12, 2011

[...] the fact that it recommends a deepening of austerity measures at the very time when elsewhere, and even in Ireland, there is beginning to be a bit of a rethink, and at a point where the international context is [...]

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10. Don’t cry (crocodile tears) for me… John McGuinness… « The Cedar Lounge Revolution - November 18, 2011

[...] There are reasons for that, as articulated by Richard Curran in the Sunday Business Post some while back… [...]

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11. Christin - February 20, 2013

Only 1 address, while. Bond With Your Dog Through Play.
Dog Training Using Praise.

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